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Posted by Karmabunny on

What to Do When the Threats Come from Within

Research has shown that Australian employers have lost a massive $350 million in 102 cases of employee fraud over the past decade. The largest amount stolen was $27.4 million, with an additional six cases involving at least $10 million being taken by the employee/s.

The most affected businesses were understandably in the banking and financial services industry, whilst many of the other cases involved employees who were in a financial function at other organisations. This is likely because employees who have direct access to finances are more able to create false invoices or conduct payroll fraud, all while having the knowledge and access to cover their tracks effectively.

The prevalence and growing rate of employee fraud raises the question of how organisations can mitigate the risk of employee fraud and protect their business.

What can organisations do to protect themselves from employee fraud?

There are a number of safeguards that organisations can implement in order to minimise and prevent employee fraud.

An initial non-negotiable precaution is to implement robust workplace policies and procedures. This may include policies that require expenses over a certain amount to get sign-off by another employee, regular audits by third parties, consistent checking of invoices against payments, and provision of an anonymous channel for whistleblowing by other employees.

Another safeguard is to ensure that employees undergo regular training about what internal fraud looks like – the red flags to look out for in their colleagues’ behaviour and to advise the channels open to them to report suspicious behaviour. The better educated staff are about fraud, the more they will be discouraged to personally partake in fraudulent schemes and the more confident they will be in understanding what kinds of activities to report.

Last but not least, one of the most important precautions to take is to conduct thorough background screening on prospective new employees and to ensure there is ongoing monitoring of staff during their tenure.

Background screening on candidates helps organisations understand the integrity of the employees they hire, along with identifying any past criminal or financial issues that may be a red flag for potential misdeeds and fraud if hired. This information enables hiring teams to make more informed decisions when selecting a successful candidate.

Meanwhile, ongoing monitoring helps to ensure that employees continue to be suitable for the workplace and unlikely to commence fraudulent behaviour during their time at the organisation. Ongoing monitoring is important because employees often don’t start out intending to commit fraud, rather, difficult financial situations may arise which prompt them into considering fraud.

Whilst the implementation of these measures may take time and resources, they will help to mitigate and prevent cases of employee fraud in the long-term. This will potentially save the

organisation significant money, time, and reputational damage in the future, and is a foundational risk management activity for organisations to undertake.

How can National Crime Check help?

National Crime Check is a leading provider of background checks in Australia and New Zealand. We offer market-leading technology to conduct thorough checks, which in turn enables organisations to have a full view of candidates prior to making an offer of employment and on an ongoing basis.

After decades in the industry, National Crime Check has integrations with the most authoritative Australian and New Zealand government data sources to ensure screening results are accurate and timely. Contact us on to discuss your background screening needs and protect your organisation from potential employee or internal fraud.

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