COMMON BUSINESS FINANCIAL FRAUD SCHEMES

1. Billing fraud: This type of fraud involves an employee or vendor submitting fake invoices or inflating invoices to skim off money from the company.
2. Check fraud: Check fraud occurs when someone steals a company check or forges a signature on a check to withdraw funds.
3. Payroll fraud: An employee or outside party can commit payroll fraud by creating fake employees or inflating salaries to siphon off money from the company.
4. Expense reimbursement fraud: This type of fraud involves an employee submitting false expense reports or inflating expenses to receive more money than they're entitled to.
5. Cyber fraud: Cyber fraud is a growing threat, where criminals hack into a company's computer system to steal sensitive financial information, such as credit card numbers, bank account information, or personal data.

HOW TO AVOID BECOMING A VICTIM OF BUSINESS FINANCIAL FRAUD

1. Implement strong internal controls: Ensure that your company has robust internal controls in place, including segregation of duties and regular audits of financial transactions.
2. Educate employees: Train your employees on the various types of financial fraud and how to identify them.
3. Monitor financial statements: Regularly monitor your company's financial statements to spot any unusual activity.
4. Review contracts: Review contracts and invoices to ensure that they are accurate and legitimate.
5. Use technology to your advantage: Use software to detect fraudulent activity, such as expense management systems and fraud detection software.

WHAT COURSE OF ACTION SHOULD A BUSINESS TAKE IF THEY ARE THE VICTIM OF BUSINESS FINANCIAL FRAUD?

If you suspect that your business has been a victim of financial fraud, the first step is to investigate the matter. This may involve hiring a forensic accountant or fraud investigator to help you identify the fraudulent activity.

Once you've identified the fraud, you should contact law enforcement and file a police report. You should also contact your bank and credit card companies to report any fraudulent charges or transactions.

ARE THERE CASES WHERE THE BUSINESS IS HELD LIABLE FOR THE BUSINESS FINANCIAL FRAUD?

Yes, there are cases where a business can be held liable for financial fraud, particularly if the company did not have adequate internal controls in place to prevent the fraud from occurring.

It's essential to ensure that your company has robust internal controls in place to prevent financial fraud. This includes regular audits, segregation of duties, and training employees on how to identify and prevent fraud.