Fraud Defense: Detect & Prevent

Accountant Fraud - Complete Controller

Many organizations and business owners face fraud yearly due to their employees or business partners. New entrepreneurial start-ups and small businesses are more vulnerable. The risk of fraud has increased due to the advancement of technology and the progressive development of the world into a global village. The increased awareness of technological development and complex organizational structure requires corporations to incorporate internal anti-fraud approaches to combat fraud.

According to research, organizations face a 5 % loss due to fraud each year, in which internal employees commit 85% of severe fraud cases. Organizations should develop multi-layered fraud prevention strategies while keeping these statistics in view.

Following are the warning signs to detect fraud and stealing by an accountant.

LastPass – Family or Org Password VaultChange in Habits and Behavior

A good manager should know their employees. They manage their time to have frequent conversations with each other. Good managers are concerned and aware of any problems they face professionally or personally. The basic information about your employee’s family, life, and habits will help detect any change in an employee’s habits.

The first sign that your accountant is stealing from you is a change in their habits. Suddenly becoming more proactive in your business, becoming disobedient towards you, or being on the phone more frequently are all signs that could be a red flag. Also, if they are suddenly working when no supervisor is present, keeping an eye on their activities is essential.  

Accountant in Bad Waters

Sometimes, an accountant under financial stress can commit fraud to fulfill their needs. The financial crisis could be due to the following circumstances: 

Unexpected Debt

Sudden debt, such as from gambling, drinking, or divorce, may be a reason for an accountant’s fraudulent behavior. An accountant in financial strain may be a potential risk to your business. Financial burdens act as the trigger for theft.

Spending More than Earning

If an accountant is spending more than they are earning, it could be a warning sign. Excessive spending on cars, shopping, homes, or loans can lead to financial strain, and the accountant may think the only way out of this is by committing fraud.

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Loose Internal Controls

A company’s loose internal controls provide an opportunity for theft. Easy access to assets, checkbooks, or signed stamps makes it easy for the embezzler to steal.

How to Prevent Fraud

Fraud deterrence is essential for all organizations. The bigger the organization, the more likely fraud is.Fraud is as old as human history and can happen to any company or business, despite the organizational structure and the number of workers. Small business managers tend to trust their workers more than bigger organizations.

There may be weak internal controls. Fraud affects the company’s finances, image, and morale. All these factors decline after a fraudulent case occurs. Most organizations adopt shortcuts for fraud prevention, which largely decrease the opportunity for fraud.

Internal Controls

The internal controls of a system and organization define the plans to prevent the company and its assets from fraud and theft. This system should be revised frequently to analyze its effectiveness. It should be regularly updated according to the company’s new needs, developments, and advancements. Internal controls should clearly define the accountability and compliance of its employees.

Documentation is an integral part of an internal control system and the most crucial tactic for fraud prevention. All procedures and transactions should be documented to minimize fraud. Every expense should be approved and countersigned by a managerial-level employee to ensure the validity of receipts and expenditures. Restrict all physical and technical approaches to documents and information.

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Segregation of Duties

Clear segregation of duties is crucial for internal control. Distributing bookkeeping and payments among two or more accountants or bookkeepers helps prevent fraud.

Outsource Accountant

One of the best ways to prevent fraud is to outsource accounting and bookkeeping functions to a third party.

Be Systematic

Use accounting software to prevent fraud. QuickBooks handles all the key accounting processes and prevents fraud. Assign limited rights to all employees according to their job descriptions and responsibilities. Don’t share passwords and logins.


Fraud in business can result in significant financial loss, time wastage, and a ruined reputation. Implementing multi-layered fraud risk strategies can protect a successful business from fraud and theft.

CorpNet. Start A New Business NowAbout Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.Complete Controller. America’s Bookkeeping Experts