With the ever-increasing rise in white-collar crimes like fraud, misappropriations of cash, improper use of funds, and other forms of occupational crimes, proprietors and employers are becoming victims of embezzlement. In many cases, the main perpetrators of such crimes are employees who have access to the business organization’s funds or senior executives in the case of a corporate enterprise.
According to Steve Sorensen, a financial consultant from Colorado, United States, who provides expert advice to corporate enterprises and individual proprietors on the measures they need to take to prevent embezzlement in their businesses, the size of the organization is irrelevant. This prominent Certified Public Accountant along with the professionals from the Steve Sorensen Embezzlement team have been assisting and educating businesses in Colorado on the steps the owners and top management need to take to avert such crimes for the last thirty years. These steps include:
List of Contents
- 1 Knowing when the business organization is most vulnerable
- 2 Establish an anti-embezzlement policy within the organization
- 3 Reinforce the values that the organization places on integrity
- 4 Establish audit committees and ensure regular meetings
- 5 Create special teams to assemble and implement plans to reduce the organization’s exposure to such crimes
- 6 Review the organization’s insurance
Knowing when the business organization is most vulnerable
At certain times of the year, some business organizations are more vulnerable than others because of a huge volume of transactions involving cash, and employees handling such cash have a temptation to misappropriate or swindle it.
Establish an anti-embezzlement policy within the organization
The top management of a corporate enterprise or proprietor hands out a handbook to the employees on their appointment ensures that it contains an anti-embezzlement policy, and reviews its wording regularly. Make it clear to all employees that the organization will not tolerate such behavior and will not hesitate to terminate employees who indulge in such activities. Moreover, the organization should encourage responsible employees whose integrities are beyond doubt to report such incidences if they suspect one of their co-workers is indulging in such activities.
Reinforce the values that the organization places on integrity
Whenever employees receive promotions, increases in remunerations and bonuses emphasize that management or proprietor is awarding such people because of their performance and integrity.
Establish audit committees and ensure regular meetings
It is imperative for the management of business organizations to establish audit committees or similar boards to address activities involving embezzlement and other internal crimes. The head of such committees should spearhead the internal crime prevention methods and the investigation of alleged incidences of such crimes.
Create special teams to assemble and implement plans to reduce the organization’s exposure to such crimes
In the case 0f corporate enterprises, special teams comprising of the chief financial officer and members responsible for risk management and internal audit should implement the plans relating to the organization’s anti-crime policy. Moreover, the team members should have relevant experience in communications, counsel, information technology, human resources, and operations.
Review the organization’s insurance
Taking out an anti-embezzlement policy from an insurance company that includes protection cover against fraud and employee embezzlement is sometimes the best course of action. It is imperative for the management of a corporate enterprise or proprietor to be familiar with the terms and conditions of the policy especially ‘proof of loss’ requirements. Such a policy should provide for ‘professional fee ‘coverage if a private investigative agency conducts investigations on such incidences.
The professionals from the Steve Sorensen Embezzlement team say that the above measures go a way in preventing the incidence of embezzlement in an organization.