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As an owner or executive, the greatest assets you protect are the value, goodwill and reputation of your company.
Setting the right tone at the top is vital for cultivating a culture that displays a desire for avoiding costly mistakes, an appreciation for strong controls, a zero-tolerance attitude towards fraud and an emphasis on controlling costs.
Protecting Goodwill
The positive reputation of your business starts from within and a proper tone at the top protects your company’s goodwill. An ethical atmosphere created by your organization’s leadership sets that tone. Employees who are aware of management’s adherent interest in securing its assets by closely monitoring its controls are less likely to act unethically. Communicating an atmosphere of strong oversight and zero-tolerance is vital to reducing exposure to damaging behavior.
Protecting the Bottom Line
External pressures may distract you from internal opportunities and risks. Opportunities to reduce costs may be missed, poorly supervised or fatigued staff may make unintentional but costly mistakes, available discounts may be ignored and poor internal controls may allow employee fraud.
Can your bottom line tolerate these costs?
Taking Action
Employee Training. The first step to communicating high expectations is by educating your employees on where to look for fraud and what to look for. Having yearly training sets the tone that your organization is not complacent when protecting its assets.
“46% of frauds are found by someone speaking up”
Strong Policies. In addition to training, employees will receive tools for taking safe and appropriate action when suspicions develop. Having documented policies in place will protect your organization and clearly communicate to your employees, investors and shareholders that your organization is proactively committed to operational excellence.
Fraud Hotline/Webline. Implementing safe and private avenues for employees to communicate suspicious behavior encourages employees to report red flags - without fear of repercussions. Employees will be given wallet cards with a phone number and website to report their findings. Reports will be taken by a certified fraud examiner and evaluated for their validity. The claims will then be reported to you to decide next steps.
“Victims who have a hotline average a loss of $100k. Those without average $250k”*
Surprise Audits. The element of surprise is very powerful in setting a zero-tolerance tone. On a quarterly basis a certified fraud examiner will be on site to test technical and procedural controls and operational processes. Employees will not be notified in advance of the area being tested. Instilling this process encourages employees to be attentive to identifying areas that could be susceptible or are already at risk for lost earnings. Additionally, surprise audits can be a powerful tool for identifying costly mistakes.
“Victims who undergo surprise audits average $70k in losses. Those who don’t average $207k”*
Improving Controls. If loose controls or operational inconsistencies are identified during our visit you will receive an improvement plan on how to tighten or enhance your controls and operations.
Enhanced Operations. In the end this process of continual testing and improvement will enhance your operations, ensure you are compliant with your contracts and reduce expenses related to inefficiencies or oversights.
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Stop worrying about what you can’t control and start focusing on what you can. Strong internal controls and operations will make a positive impact on your goodwill and bottom line.
Call Ray Dunkle, CPA, CFE, CFF at
(330) 572-8046
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