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March 12, 2024Dannible & Mckee LLP Provides Tips to Businesses on How to Avoid Fraud
Businesses are highly susceptible to fraud attempts, whether from hackers trying to access their network or from their own employees. In fact, hackers make more than 600 attempts a day and more than 26,000 in a month trying to access a business’s system without that business even realizing it’s happening. Employees can also commit fraud by hiding their attempts, such as giving themselves a raise, diverting checks or manipulating expense reports. In recognition of National Fraud Prevention Month this March, Dannible & McKee, LLP, a certified public accounting and consulting firm, recommends that companies follow these tips to protect themselves from internal and external fraud:
- Keep a close eye on employees in the accounting and finance department.
- Review bank statements, credit cards and payroll regularly.
- Get in front of your bank.
- Talk to your insurance agent.
- Set up cyber security protocols through Information technology (IT) or hire an IT consultant.
- Install 2-Factor Authentication on digital programs.
- Hire an accounting firm specialized in fraud prevention
“Fraud is very common among businesses,” said Christopher Didio, CPA, CFE, managing partner at Dannible & McKee. “National surveys indicate that up to 5% of a company’s revenue can be lost to fraud every year. However, this can be prevented by having the proper measures in place.”
Dannible & McKee knows all too well what those measures are after it was a victim of a fraud attempt in February of this year.
“We had someone try to hack into our system during the busiest time of our year,” Didio said. “Little did they know that we are experts in fraud prevention, and we were able to stop the attempt from progressing further.”
Programs that they use, like Sophos, protect business networks by detecting potential threats and immediately alerting administrators of the threat. It will then lock down the business’s system until the threat has been eliminated.
“We have all of the proper cyber securities in place,” Frank Merkel, supervisor of IT services at Dannible & McKee, said. “This not only protects us from any harm, but most importantly, protects our clients from malicious threats to our cyber network.”
While IT systems can provide a level of protection to companies, they are not foolproof when it comes to preventing malicious acts committed by their own employees. There are several types of employees that commit fraud, but most commonly they work in the accounting and finance department. Generally, employees who engage in such actions share certain traits. These include individuals who:
- Take frequent vacations
- Get defensive when asked sensitive questions
- Arrive late to work every day
- Have made drastic changes their appearance or lifestyle
- Spends an unusual amount of time at the casino
If you want to reduce the risk of employee fraud in your business, it is recommended to work with a forensic specialist like the ones at Dannible & McKee. They can assist in analyzing your business processes and internal controls to identify areas of weakness and vulnerability.
