Internal Sources of Fraud

Internal Sources of Fraud

February 1, 2024 by investor

Internal Sources of Fraud

There are several sources of fraud within a business.

Here’s a list of internal sources to review:

Identity theft — the capture and selling of personal information for illegal uses.

This is done by fraudsters capturing employee information through bank accounts and tax returns. 

Asset misappropriation — this is basically theft.

This is often through forged checks.

Embezzlement — this is the illegal use of the company’s funds.  

This is often done by charging personal expenses on the business account. 

Payroll fraud — this is the misuse of payroll. 

One example is claiming hours that were not actually worked.

Employment fraud — claiming work history that doesn’t actually exist.

This comes up in hiring people who claim to have experience that they don’t actually have or omitting key information such as criminal history.

Set up internal controls in your company to prevent fraud.

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Hall T Martin is the director of Investor Connect, which is a 501(c)(3) nonprofit dedicated to the education of investors for early-stage funding. All opinions expressed by Hall and podcast guests are solely their own opinions and do not reflect the opinion of Investor Connect. This podcast is for informational purposes only and should not be relied upon for the basis of investment decisions.