Internal Frauds: Which are the most common and how can they be managed?

In companies, internal frauds are not all the same, even if they can all be harmful to business management; however, Forensic Accounting Service in India is at least one and the best solution to avoid them.

In the guide that follows we will find out what are the different types of fraud that a company may face and describe them in detail. Later we will talk about fraud management, with a series of easily applicable solutions.

But let’s start by understanding what types of fraud can be committed.

1. Table of Contents

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   Internal fraud: fraud in documents

This type of internal fraud occurs whenever the document presented as the evidence does not meet the legal requirements by the issuer to be considered a valid invoice or receipt.

It is therefore to all intents and purposes a missing document. It is a fairly common and sometimes involuntary case; this does not mean that it does not pose a problem for business management.

2. Chronological fraud

Among the various types of fraud, the so-called chronological one refers to the mismatch between the date entered in the expense report and the day on which the transaction or purchase was carried out. Forensic Accounting Service in Delhi.

Almost always these are invoices or receipts that do not coincide in terms of time or place with the movement carried out.

Also, in this case, it could be an involuntary error; however, the mismatch between documents and expense data will in the best of cases lead to a lengthening of the management times of the expense report.

3. Over-spending

Sometimes, the expenses presented by the employee through an expense report do not meet the limits set by the company’s travel policy, exceeding the maximum authorized for that trip or the period.

Normally, for these types of fraud, companies have specific procedures and attachments that the employee must complete to justify any excessive expenses. However, these attachments might be not filled in or the employee does it incompletely or does not correspond to the indications.

Forensic Accounting Service in Delhi detects this unwarranted overspending by employees and automatically notifies the business manager or owner. If the worker cannot, therefore, justify the excesses of expenses, this behavior will be considered a fraud.

For all these types of fraud, however, there is a solution.

Fraud management: how to solve the problem

 

The different types of fraud, unfortunately, are a reality that affects every company, from the largest to the medium and small ones. To avoid them, the first step is to know the most common frauds.

The types of fraud that occur most frequently are type 2 and type 3, i.e., the chronological irregularities and overspending.

Most of these types of fraud, especially if unintentional, can be avoided by implementing three simple procedures:

• Employee training on how to avoid fraud
• Choosing Forensic Accounting Services in India
• Periodic expenditure control audit
• Adoption of digital solutions such as management and anti-fraud software

Turning to Forensic Accounting Services in Delhi, alone can solve most of the problems and consequently reduce the number of internal frauds.