A leading survey of New Zealand businesses found that over 50% have experienced at least one case of fraud. These businesses were of all different sizes, structures and within all industries – the perpetrators of fraud, error and corruption are not discerning, and any New Zealand business could be at risk.
Fraudulent Behaviour Is On The Rise
Without adequate checks, processes and security measures, a business can be subject to fraudulent activity from staff members or customers without even being aware of it. Fraudsters often start on a small scale, for example purchasing personal items with a company credit card, using company equipment for personal use, or taking excess stock. Unchecked behaviour can lead to increasing dishonesty and result in significant losses or “financial leakage” for the company.
When it comes to customers, the demand for faster transactions places business owners under increased pressure – which can be when mistakes are made and corners are cut. This can be especially risky when making decisions about extending credit to customers and identify verification.
Preventing Business Fraud
Business owners need to be just as aware of outgoing funds as they are of incoming funds. SMEs often do not have the resources or skills required to internally identify and manage risk, but much financial and emotional heartache can be avoided by regular internal audits. Outsourcing this function to an experienced assurance specialist can provide the necessary expertise at an affordable and practical price – particularly considering the positive financial impact of stemming the cost of fraudulent activity.
Experienced risk management experts perform a variety of specialist tasks tailored to individual businesses, such as identifying incompatible roles within a company and providing advice and solutions for improving business procedures. Expense and cashbook analysis to identify any non-business processes can be performed easily, often utilising data analytics to further identify inappropriate transactions. The procedures can be carried out with minimal impact on budgets and staff time, while maximising the impact on profitability, transparency and control.
Business owners should take the statistics seriously and practice diligence and security. It is not unheard of for small businesses to be crippled at the hands of fraudulent activity – which can be entirely preventable.
If you are concerned about your business being at risk of fraud, please contact Sungesh Singh, Audit and Assurance Director, at sungeshs@uhyhn.co.nz or phone (09) 839-2184.