Top 5 fraud risks your business should watch for in 2023

In 2022, we saw society adjust to the COVID-19 pandemic and gradually return to normalcy. But, unfortunately, a crisis at the scale the world experienced in the last few years provided fraudsters with increasing opportunities.

We examine some of the circumstances that allow fraud to occur, and how best to position your company to mitigate the top five fraud risks in 2023.

1. Cyber fraud

Cyber fraud is the top fraud risk to watch for in 2023. #CyberCrime increased in volume during the pandemic and has yet to wane. As a result, small and medium-sized businesses will continue to be more vulnerable to cyber attacks. According to BDO’s Global Mid-Market Corporate Fraud survey conducted across 131 countries, #cybersecurity fraud was the most reported fraud at 46%, followed by asset misappropriation at 28%.?One of the best ways to mitigate cyber fraud is to secure your IT infrastructure.

2. Employee fraud

We are now accustomed to making our data tables from our dining tables and preparing bank reconciliations from our bedrooms, which is why, it’s crucial to be mindful of changes to how we work to combat employee fraud.

To mitigate #EmployeeFraud risks, we should modify our internal controls and implement different types of management oversight.?With remote working, it may be easier to abuse the present controls, falsify or bypass approvals, or forgo asking questions when things aren’t adding up.

3. Supply chain fraud

In these difficult and expensive times, people may be more likely to get creative with how they source products, parts, and materials. To keep fraud at bay, organizations must continuously examine and enhance risk management systems to ensure they are well-positioned to prevent, detect, and, if needed, fight fraud.

4. Asset misappropriation

One of the most common forms of fraud is the misappropriation of assets. This is when someone within a company uses their position to steal from an organization.

Take the following steps to combat #AssetMisappropriation :

• Conduct thorough background checks on candidates before hiring, vendors and other potential partners??
• Conduct random audits of company accounts
• Do not give one employee sole access to multiple or all systems
• ?Implement checks and balances for financial tasks
• Conduct random compliance reviews of procurement policies
• Implement an ethics hotline to encourage employees to report wrongdoing

5. Insurance fraud

Due to the financial aftermath of the pandemic along with the threat of a possible recession, insurance fraud will be on high alert in 2023. Fraudulent insurance claims impact honest customers and the public. As a result, businesses can suffer indirect economic losses, valuable public service resources are used, and insurance companies will bear the financial brunt. In addition, fraud of this kind tends to have a ripple effect and quickly leads to higher premiums.

Get more #FraudPrevention strategies by reading the full article on bdo.ca .