Accounting firms are also at risk of employee fraud
Accounting firms can be just as much at risk of employee fraud as other businesses, despite the fact that accountants themselves are often hired to investigate instances of fraud in other organisations, according to Warwick Dolman, Director of Dolman Bateman.

Warwick Dolman says accounting and other similar professional practices are susceptible to different types of employee fraud that don’t occur in other industries.

“We have found that in many cases with accounting firms, internal fraud may not involve direct financial consequences, such as misappropriating funds, but may involve other fraudulent activities such as people managing their own clients on the side – otherwise known as ‘moonlighting’,” said Dolman.

“Such staff would use the resources of the practice to service their own clients, using the time that they would normally utilise to bill the company’s clients.

“There can be instances where employees are involved with theft of intellectual property, computer systems, business software and other sensitive data for an external interest.

“A deterioration of normal operating systems could also occur within accounting firms. Partners should not have unfettered access to company and trust funds outside of the standard checks and controls.

“Also, partners should not let procedures go by the way-side simply because their office manager or accounts clerk has been with the company for ‘ages’.

“These are all types of fraud which can hit a company hard and incur a significant cost to the profitability and reputation of the business. Only carefully structured systems and policies which are effectively enforced can prevent these types of employee fraud.

“It is therefore also vital for partners to have a firm grip on the overall systems of the business, as well as a grip on the ‘anti-fraud strength of the company’s culture.

“This also highlights the fact that forensic accounting is a specialised field requiring professional fraud investigators to carry out fraud prevention and investigation for organisations.

“Accounting firms are generally very good at calling in fraud investigation experts for their clients, but many fail to think about this option for their own practice,” said Dolman.

Dolman Bateman specialises in the detection, investigation and minimisation of fraud in the workplace. Warwick Dolman CA, CPA is a founder and Director of Dolman Bateman.

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Released for Dolman Bateman by Dennis Rutzou Public Relations. For further information contact David Lizzio or
Kristen Mackie on (02) 9413 4244.