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Fraud. The dreaded word that none of us are comfortable addressing or discussing, especially when it comes to how it may impact you or your business. But it’s important not to avoid conversations about fraud. Why? Because several studies and statistics support that businesses may lose approximately 5% of their revenues every year due to fraud. And when fraud is concealed, it may continue for years before being discovered. Further, fraud remains a strong indicator as to the failure of a business. Although attempts are made to recover, many businesses cannot overcome the negative impacts both financially and reputationally and are ultimately forced to close their doors within a few years.

So, what can you do to prevent fraud?

First, it’s important to remember that no controls or systems are perfect. Due to limited resources and personnel, opportunity for fraud will always exist. Thus, as technology and the ways of doing business continue to evolve, so too must your control processes and procedures. Periodic and systematic evaluations and assessments of your controls should be designed to mitigate or detect misstatements or misappropriations in a timely manner. So, while a control may not prevent fraud, it will at least detect it quickly so that you can take appropriate action.

Here are a few suggestions we recommend when it comes to preventing fraud:

If you have any questions or would like to know how Cray Kaiser can help you develop and implement internal controls, please contact us today.