Protecting Your Business from Fraud

Matt Gardiner, CPA, CFE, Partner

Every business faces financial risks from both internal and external sources. Internally, weak segregation of duties, unchecked authority, and an over-reliance on trust can create opportunities for misconduct. Externally, vendor fraud, cyberattacks, and third-party schemes often exploit oversight gaps. Addressing these risks requires a proactive, multi-layered approach.

Internal Fraud: Preventing internal fraud begins with establishing strong internal controls, ensuring proper segregation of duties, and implementing clear approval processes for financial transactions. Regular reviews of transactions, surprise audits (such as inventory spot-checks), and ongoing fraud awareness training help empower employees to recognize and report suspicious activity. This fosters a culture of accountability and vigilance.

External Fraud: External threats often arise from vendor vulnerabilities and cybersecurity gaps. Thoroughly vetting vendors through financial checks and periodic reviews, coupled with robust cybersecurity measures such as multi-factor authentication and secure payment systems, can significantly reduce exposure to risk. Maintaining transparent documentation and oversight of vendor relationships further strengthens your defenses.

Fraud prevention is not a one-time task—it’s an ongoing commitment. By establishing strong controls, clear policies, and a culture of integrity, businesses can effectively protect their assets and build trust with stakeholders. If you need guidance on enhancing your fraud prevention strategies, please don’t hesitate to reach out to us.