Do you know what an embezzler looks like?
Would you prefer to call it ‘redistribution’ rather than theft?
Do you have hard and fast hiring policies and procedures? Do you do background checks?
Do you ‘borrow’ from your own petty cash?
When you look into the eyes of your fresh-faced employees, can you tell if they’re robbing you blind?
Can you tell when a staffer is having a personal or financial problem?
How often do you do bank reconciliations?
Do you leave signed blank cheques on hand when you go on vacation?
Would you prosecute a longtime employee or settle for restitution and a heartfelt apology?
Does everyone get an office key?
Do you make daily bank deposits?
Does your office manager frequently work late/work through lunch alone?
Would you be able to go back through records to determine when the embezzlement began?
According to U.S. industry statistics, in the mid-1950s, employees stole approximately US$500 million. By the mid-1990s, that figure ballooned to US$75 billion. Not to be outdone, Canadian employees steal approximately $20 billion. Adding insult to injury, it’s said that private employers seldom reveal embezzlements to each other. This is not simply because pride is damaged but rather one’s credit rating that can suffer serious injury.
According to the Association of Certified Fraud Examiners, many employees view embezzlement as an ‘informal employee benefit.’ Some sociologists have even suggested that pilferage might actually have a positive effect on morale, therefore increasing productivity.
A study done several years ago found that 10 percent of people would never steal under any circumstance; 10 percent would steal at every opportunity; and 80 percent would steal given the right motivation.
There are many things you can do to protect your livelihood. They include:
Be an active partner in the daily operation of your business;
Actually read your bank statements;
Create a system of checks and balances;
Consider using audit professionals;
Question the unusual and the usual;
Lead by example. Don’t pad your expense account and stay out of the petty cash;
Display a written Code of Ethics;
Use an ‘anonymous’ hotline;
Call the police.
Embezzlement is not a crime of passion but rather one of cold calculation. Don’t be a victim.
