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Important Considerations• Globally, more than two-thirds of all frauds are committed by men. In the United States, men committed an estimated 58% of all frauds.• Globally, the median loss was also higher when committed by men ($156,000) as compared with women ($89,000).• Losses tend to rise as the perpetrators' tenure with the organization increases.• Small businesses are especially vulnerable because of a lack of basic internal control measures.-- Source: 2018 Report from the Assn. of Certified Fraud ExaminersExamine Workplace EnvironmentOne important factor in whether or not employees steal is their attitudes. Employees who feel they are treated fairly by their company are less likely to commit fraud. Many offenses are committed by people who hold grudges and are looking for revenge.Internal fraud drains approximately $4 trillion annually from global businesses, according to an estimate by the Association of Certified Fraud Examiners (ACFE).
The median loss from internal fraud at companies in the construction industry is $227,000, according to ACFE's latest Report to the Nations.
Although companies can experience pilferage from customers, vendors and other sources, employees account for the highest losses, when taking into account offenses such as fraudulent insurance claims, unauthorized time off and theft of proprietary information. Crimes can be as simple as stealing company supplies or as complex as sophisticated financial statement fraud.
More specifically, fraud by managers and key executives generates the highest dollar losses because these employees are in a good position to falsify financial, credential, work-related or test-related documents for personal gain.
Construction companies are more susceptible to corrupt business practices than other industries. This can include bribery and state capture.
What can your company do to prevent theft? The ACFE Report found these measures are effective:
Take a zero tolerance stand on fraud. With a few basic procedures in place, internal business theft can be significantly reduced — or even eliminated — so your construction business can flourish. Ask your accounting firm for more information.
*Securities offered through 1st Global Capital Corp. Member FINRA, SIPC. Investment advisory services offered through 1st Global Advisors, Inc. We currently have individuals licensed to offer securities in the states of AL, AZ, CA, CO, CT, FL, GA, HI, ID, IL, IN, KY, MI, MS, MO, NV, NJ, NC, OH, RI, TN, TX, WA, WV and WI. This is not an offer to sell securities in any other state or jurisdiction.