Employee fraud: Your protection may be hurting you
Finance chiefs place a lot of trust in front-line staffers as the first line of defense in preventing fraud. But according to new research, these front-line workers may not be nearly as trustworthy and effective as CFOs think.
Nearly a quarter (23%) of employees look the other way if they see misconduct taking place, according to the recent “Integrity Survey 2013,” by KPMG, a U.S. audit, tax and advisory services firm.
That’s a huge bump from the 6% of employees who admitted to doing this just five years ago.
Contracts, payment terms susceptible
One area that’s particularly susceptible to fraud: vendor contract or payment term violations.
Thirty-five percent of employee say they’ve observed their peers violating vendor contract or payment terms.
Employees may not be coming forward with this information because they believe getting results and hitting goals are the only things that really matter in the long run.
So it may be a good idea to remind finance staffers that following the proper procedures is an essential part of getting results and hitting benchmarks — and that looking the other way or taking shortcuts is in no way acceptable.
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