There are several different types of
business fraud. The most common types are the external business fraud. External
frauds are malicious schemes conducted by scammers to deliberately disrupt the
sales process of the company. These include breach of database, credit fraud,
identity theft and the likes. There are also some frauds that are conducted and
against the business from within the company itself. These types of fraud are
classified as internal fraud.
Internal business fraud is just as
damaging as external fraud. They both cause major losses to the company. This
is the reason why it is important to detect and identify them immediately
before the company incurs a more serious problem. In order to resolve internal
fraud, you must first learn about them. To give you an idea about some of the
most common types of internal fraud, see the list below:
- Payroll Fraud
Payroll fraud occurs when an
employee or group of employees is intentionally overpaid in order to take
advantage of the company's resources. There are two ways a fraudster can do
this; one is by tampering their time card and two is, by bribing the payroll
officer, in which case the payroll office now becomes a participant of an
organized crime. Another form of payroll fraud is including ghost employees on
the payroll. This too is another way of exploiting the company’s fund.
- Cheque Fraud
Cheque fraud is often conducted by
the person in charge of issuing cheque payments to suppliers. This type of
fraud can be hard to detect, especially since the person issuing the check is
also the ones encoding them into the system. At first glance your financial
statement may look fine, but once you begin reconciling the cheques and the
invoices, the fraud will soon be apparent. Another form of cheque fraud is
issuing cheques to a non-existent supplier using a fake invoice.
- Reimbursement Fraud
Reimbursement fraud is another type of business fraud. Some employees take advantage of their reimbursement
privileges by overcharging the company. They do this by listing down irrelevant
expenses or non-existent expenses in order to bloat the value of their
reimbursement.
- Trading Company Information
Another type of business fraud
involves disclosing company secrets to a third party in exchange for financial
gain. This type of fraud does not only result in company losses but can also
put the entire company’s existence in jeopardy.
These internal
business frauds can all cause huge amount of losses to the company. This is the
reason why it is important to invest in your company internal security system
so you can avoid running into this type of problem. Aside from actively
participating in monitoring your company’s activities, you may also consider
consulting a fraud expert. A fraud expert can help assess the current status of
all your existing security measures. They can also check your company policies
and employee policies. You may also ask for suggestions regarding upgrades and
updates to your business fraud security system to cover the latest threats to
your business.
