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It has been estimated that approximately half of all businesses fall victim to fraud each year. Therefore, businesses must not only take steps to prevent fraud, but they must have systems in place to identify and respond to fraud when it occurs. In this article, we discuss how to identify if your business has been defrauded. 

Suspicious Financial Activity

When your financials are not being delivered on time, or your budgets are not being met, this could be indicative of fraud. Things to look for when investigating suspicious financial activity include:

  • Unusual transactions
  • Mismatched payees
  • Payee identity discrepancies
  • Identical payments made to different vendors in a similar date range
  • Unprofessional invoices
  • A significant drop in sales
  • A significant increase in sales

Unusual Emails

If you receive unusual emails or emails that are noncompliant with your business’s usual practices, this could indicate the existence of fraud. In addition, it could be a sign that an employee’s email account has been compromised. Unfortunately, cyber fraud has greatly increased in the last few years, so it is important to review your computer systems and email accounts for signs of suspicious activity. 

Staff Resistance to Internal Controls

If your employees are resistant to the implementation of new internal systems or controls, this may indicate that they are hiding something. Of course, it is also common for employees to be resistant to changes in the workplace, so you shouldn’t jump to conclusions. However, when staff resistance to change is coupled with any of the other fraud indicators on this list, there is a good chance that something may be amiss. 

Unusual Employee Actions

Unusual employee actions may warrant a closer look, as these can indicate fraud. Employee behaviors that are indicative of fraud include: 

  • Requesting to work extra hours
  • Requesting to work outside of normal business hours
  • Refusing to share certain work-related tasks 
  • Insistence on only working with a particular supplier

Expensive Purchases

Finally, if an employee makes an expensive personal purchase that doesn’t align with his or her salary, you may want to investigate further. Of course, employees may have other sources of income, such as family members or other employment, so this is by no means a surefire method of detecting fraud. However, when an employee purchases something that appears to be far beyond his or her means, you should review your financials just to confirm that your business isn’t your employee’s newfound source of wealth. 

Contact a Florida Corporate and Business Law Attorney 

At Gueronniere, P.A., we provide personalized legal services and solutions to businesses throughout the state of Florida. Founded by experienced and knowledgeable attorney Grace de la Gueronniere, our firm has the resources necessary to fulfill your corporate and business law needs, as well as any matters or disputes relating to employment contracts. Please contact us as soon as possible to arrange a free initial consultation with our talented business attorney.