'Tis the Season to Lower Employees Perceived Opportunity
Dave Hammarberg
Partner of CMMC, Internal Audit, SOC and HITRUST at McKonly & Asbury, LLP
The Christmas season is a great time of year to get together with family and friends and celebrate the birth of a King. It is also a time of year when many want to give what they cannot afford. I’ve seen several frauds occur during this time of year over the last several holiday seasons. The fraud typically starts the rationalization that the fraudster is only “borrowing” the money until January, but January turns into February and so on. The fraudster deems themselves as a worthy employee and a small “loan” will not be missed by the employer. The first fraud the fraudster commits is the hardest and after that it only becomes easier and easier. Once a fraud is in motion I picture it as one of those YouTube videos of a long icy street where the cars can’t stop and keep crashing into each other. It is a slippery slope that is difficult or even impossible to fix.
Employers need to show gratification to deserving employees, but at the same time have checks and balances in place to detect fraud. Whether the employees are family members or long term employees, employers need to lower the perceived opportunity. If the employee’s pressure at home for additional income and rationalization to commit fraud are high the low perceived opportunity will deter the fraud from occurring.
How can you lower the perceived opportunity? Continuing to add or modify current controls will lower the perceived opportunity. Doing fraud risk assessments and training in different high risk areas will lower the perceived opportunity. If you have great controls in place but they are stagnate and haven’t changed in ten years, employees perceived opportunity may be inflated. Continual modification of controls is key to lowering perceived opportunity by employees.
Keep in mind the fraud triangle. Every fraud has three elements. As an employer, you can only affect opportunity.
If your organization would like to continue a discussion on this topic, or other fraud related topics, please email me at [email protected].