When checks become routine, it can spell danger!

Fraud losses to UK Business can be 1.5% to 3% of turnover!

Checking some of my child's homework at the weekend, despite having had many reassurances of "not having any homework", I discovered that some assignments had been missed on one of the online websites where their teacher can set assignments. They had not been notified by the teacher of each assignment, but had been previously told to check there regularly which they forgot to. Ignorance is bliss, well at least up until your Father finds your missing homework!

This can apply to checks and balances in business also, if you ask the same questions every time and never follow up, then you will probably get the same answer every-time, at least until you get a nasty surprise.

So the next time someone who handles any of your finances tells you its "fine" remember it may mean any of the following. 

  • Everything is actually fine!
  • There is a small problem but I think I can handle it without your help and before you notice!
  • There is a problem but I haven't noticed!
  • There is a problem I hope you don't notice before my "holiday" next week! p.s I don't have a return ticket!
Perhaps its time to change your questions and ask to see what is really going on? Its a good idea to change the questions and to ask for evidence also.

"Can we go over what happened last week?" is a much better question than "How are things going?"

Whatever your questions, always vary your routine. In case you think that looking for fraud in your organisation is not important the National Fraud Authority annual report (PDF) surveys and combines data sources to reveal extent of fraud in the UK in the public and private sector.

To approximate the scale of fraud loss that could be suffered by the UK private sector, the conservative estimate of 1.4 per cent has been applied to the turnover of the UK private sector by industry. ....
Respondents providing an estimate (91 respondents10) reported that on average fraud losses against their organisation could be 3 per cent of turnover. However, amongst those who were ‘sure’ or ‘very sure’ (37 respondents), this estimate reduced to 1.4 per cent of turnover.
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Any other problem that is going to take 1.5% to 3% of turnover out of a company should be subject to great interest from management and who should provide the appropriate reaction. Fraud is a very real problem for all businesses, so ask the right questions and don't ask the same questions all the time!

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