Employee fraud: The red flags you need to identify now

by AB27 Aug 2013

There are many different types of employee fraud on the rise – most committed by trusted employees, William Buck partner, Leo Tutt, tells BrokerTV. But there are certain red flags business owners can look out for.

“You’ll tend to find that it is a trusted, long-term employee acting alone,” advises Tutt. “From the company’s perspective, they’ve placed a great deal of trust in the employee and perhaps they don’t even understand what the employee’s role is and how much control they actually have.”

He says red flags include inconsistent results and employees who fail to take leave.

“[It can mean] they are reluctant to allow a fresh set of eyes in who might discover the fraud. Another example would be where there’s a total lack of documentation over key transactions.”

Furthermore, ASIC spokesperson, Joanna Bird, says that in their recent review of industry practice, the regulator found there were not enough businesses conducting thorough reference checks as part of pre-employment screening.

“Well, what we found was that not everybody did a proper reference checking…Nearly everybody did a police check, but in fact not everybody did reference checking. If you approach the previous licensees and you can’t get proper references, we think that licensee should make sure that they put in place other mechanisms to control the risk created by taking on a new adviser.”

To watch the full interview with Leo Tutt and Joanna Bird, CLICK HERE