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Don’t think you have or will have a
problem? As one veterinary practice that discov-
ered its technicians had stolen pet food and drugs put it: The best defense is a good offense. Do your best to limit the opportunity for theft by having good con- trols in place. It is much easier to protect against theft than it is to uncover it and deal with it later. Figure your year-end audit will dis-
cover any problems? Audits are over- emphasized, according to ACFE’s 2010 Report to the Nations on Occupational Fraud and Abuse. Regular external audits rank com-
Perform a risk assessment by walking through and outside the business to note existing security measures and to identify deficiencies.
paratively poorly in both detecting fraud and limiting losses. Yes, they are impor- tant and have a strong preventive effect, but don’t rely on them exclusively for fraud detection. Surprise audits are another animal.
That low-cost option not only can detect fraud, but also creates a perception of detection. Those considering stealing will think again if they believe their theft will be quickly detected. Before deploying security measures,
begin with a comprehensive look at your operation.
Assess the risks Perform a risk assessment by walking
through and outside the business to note existing security measures and to identify deficiencies. Look at all possible areas where theft could occur: drug storage, displays of higher-priced pet products, cash drawer, safe, computers, storage areas and even closets where staff store purses or jackets with wallets. Look at access points and consider
who uses them. Look for ways to control, deter and detect problems. If you don’t feel qualified, call in a security expert. Two associations whose members
deal with business security issues are the International Association of Profes- sional Security Consultants, Inc. (IAPSC,
iapsc.org), which has an online directory of members, and the ACFE.
Sheila Keefe, a certified fraud exam-
iner with BDR Advisors, LLC in Lake Geneva, Wis., says a professional risk assessment for a small business typically takes an afternoon. It involves looking for vulnerabilities
and areas with items that can be con- verted to cash. It reviews the internal con- trols flowchart to make sure functions are separated so no one can steal and conceal. For business owners concerned that
initiating fraud deterrence tools could signal distrust, Keefe has noted that the involvement of a third-party consultant can help ease morale concerns. “Many business owners want to be
friends with everyone. They feel uncom- fortable telling employees about secu- rity practices that suggest they view the employees as untrustworthy.” With Keefe onboard, owners can tell
employees that, whether it is the installa- tion of security cameras or implementa- tion of a new policy, “it’s what the expert suggested.” Keefe also advises business owners
to tell employees that the security mea- sures are good for staff peace of mind because they “don’t get paid enough to have this worry” in case a loss would be discovered.
Educate employees It almost sounds counterintuitive,
but educating staff members is an orga- nization’s top fraud detection method, according to ACFE. Businesses with antifraud train-
ing have lower fraud losses. Education includes discussing with your employees exactly what constitutes fraud, how it hurts everyone and how to report ques- tionable activity. Discuss how you would want them to
report any suspicions, suggest that those who have stolen correct their ways and emphasize that there is a “zero-toler- ance” policy for fraud. Tell staff members to discuss with you any personal finan- cial problems they may having so they can be directed to proper help.
Trends magazine, April 2012
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