Every business worries about offenses that could lead to criminal charges. The mere allegation of corporate fraud could have devastating effects for an entire company, including decreased business, negative publicity and lower morale. The average business in the United States loses 5 percent of its revenue to fraud. Globally, fraud causes $3.7 trillion in loss every year.
It behooves businesses to take proactive measures to prevent white collar crime within their ranks. In this post, we will examine three few useful tips that businesses can implement to avoid criminal fraud charges.
- Set up a tip system
Set up an anonymous system for employees to report suspicious activity. Assure workers that there will be no retaliation for reporting fraud. Hotlines are the most effective tip systems.
- Use proactive data mining
If your company is tech-based, proactively mining data can alert you to suspicious activity. In fact, businesses with data monitoring systems in place had 60 percent fewer fraud cases than businesses without.
- Know your legal options
Many businesses choose to retain an attorney who understands corporate law. This way, companies have an advocate who can help them comply with the law. In addition, a business attorney can provide guidance if a party alleges wrongdoing or a company does discover that an employee may have committed illegal activity.
- Allow external audits
External audits are a crucial tool to identify and prevent corporate fraud and other white collar crimes. Having an objective outsider examine a company’s internal processes may seem intimidating, but an auditor’s watchful eye can pick up on things that internal audits may not. Companies should rely on objective audits to alert them to fraud and other illegal activity.