Employee fraud detection is one of the most insidious things that can happen to an organization. This is because in most cases, it is not about someone walking in with a gun in hand and decamping with the loot, as happens in the case of a bank robbery. To give an allegory, a bank robbery is like an accident that is identifiable and is witnessed by many people. It is quite physical in nature, whereas an employee fraud is a bit like cancer. It grows within the body without giving the slightest hint of its presence. In most cases, its detection is a little late in the day.
To stretch the allegory stated above a little further, without meaning the slightest offense to those suffering from this disease or organizations that are a victim of employee fraud and detection; it can be stated that while in the case of early cancer detection luck plays a major role; the same need not be said about employee fraud and detection. Organizations can be on their guard when it comes to employee fraud and detection.
Management needs to keep its eyes and ears open towards all employees. The employee committing the fraud does not wear his or her personality on the sleeve. Such an employee does not go about brandishing his or her attitude or announce an intention to fraud the company. Frauds can happen from within from highly trusted employees, or they can happen to be people who have access to sensitive financial or business information.
This is not to imply that every employee has to be suspected, but any business has to be open to the probability of someone from within committing a fraud. Employee fraud detection and prevention begins with business leaders keeping an eye on unusual, unexplained changes in the financial stature or appearance of an employee.
Putting processes in place goes a long way in helping achieve Employee Fraud Detection and Prevention. When a financial bill has to be passed, it has to be made to go through various levels and layers before approval. This puts a lid or cap on the possibility of any one person assailing a tight system and exploiting its loopholes. Although most frauds have been committed with teams colluding with each other; management can put in place a tight process aimed at employee fraud detection and prevention.