Abstract
Problem statement: Small businesses have unique problems in fighting fraud. Typically there are limited resources devoted to anti-fraud efforts by small businesses. Employee fraud typically results in monetary loss, often not recovered, investigation expenses and negative impact on employee productivity and morale. Conclusion/Recommendations: This study provides information to assist the small business entrepreneur in identifying potential fraud risks and to enhance their organization's fraud prevention measures.
Highlights
The purpose of this study is to provide information to assist the small business entrepreneur to identify potential fraud risks and to enhance their organization’s fraud prevention measures
To avoid being a fraud victim small business entrepreneurs should identify fraud risks within their organization and, arm themselves with this increased awareness of risk, improve anti-fraud measures in an effort to help prevent losses from fraudulent activities
Summary
Median loss for larger organizations (Association of Certified Fraud Examiners, 2008a; 2008b). According to the Association of Certified Fraud Examiners (ACFE) 2010 Report to the Nation, typical organizations lose 5% of annual revenue to fraud. Employees who steal and commit fraud against a small business must have motivation or perceived pressure to do so. Possible sources of pressures include: greater risk of fraud than their larger corporate counterparts. Larger organizations devote more resources to preventing fraud. There are limited resources devoted to anti-fraud efforts by small businesses. Note that three of the top four methods of fraud in small businesses are billing schemes, check tampering and skimming. Much small business fraud involves situations where controls are weak and duties
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