Some cynical people believe that no organization is free from employee fraud. Even small organizations are hardly immune, despite the trust such employers place in their employees and the controls they have in place. Consider these common misconceptions about employee fraud…
The Ontario Court of Appeal recently confirmed that when an employee was terminated for stealing from his employer, he was still entitled to his annual bonus because it was clearly an integral part of his contract, even if he had breached his fiduciary duty.
Reducing the risk of fraud from both external and internal sources is something that all businesses have to consider at some time, or continually, depending on the owner’s approach and taste for living on the edge. But seriously, fraud is a serious problem that can damage or even destroy a business, particularly small and medium ones, which can’t afford the potential losses.
Employee fraud is on the rise, as organizations cut back on staff, and their internal controls slacken as a result. However, the monetary loss is just the beginning of the problem. A recent white paper from Grant Thornton LLP notes that, “Failure to crack down on this unethical—and indeed criminal—behaviour blurs the line between right and wrong. It creates a culture of entitlement that can extend across the business. And it can open the door to more significant corporate theft.”
Have you experienced theft at your business? Who did it—an outsider, a new hire or the long-term employee you’d never have suspected? It could be any of them, and you shouldn’t be surprised if it’s the latter.