1.) ?Employee lifestyle and behavioural changes, living beyond their means.
2.) Weak internal controls/ lack of segregation of duties (i.e. one employee handles all the bank statements, cash transactions and deposits). Ensure double manned deposits and over sight on cash controls.
3.) Management overriding company policies or controls without proper authorization
4.) Inconsistent financial results to market trends
5.) Lack of credible documentation or information (i.e. lack of original receipts for expense reports)
6.) Excessive number of account write offs or unexplained adjustments
7.) Accounts not reconciled on a timely and consistent basis.
8.) Unexpected change of vendor or a vendor without a physical address
9.) High employee turnover
In today’s business world, most upper-level management personnel and business owners believe that their organization is safe from fraud. Most are under the impression that their employees, co-workers, and possibly co-owners have only the best intentions for the organization. It would be ideal if that were true, however, that’s often far from the truth.