Expert section
Internal fraud: the early signals visible in your processes
Internal fraud is rarely found in the cash register. It is found in the process: in who decides, who executes and who checks the result.
Three conditions
Internal abuse requires a combination of three things: opportunity, motive and rationalisation. A company can realistically influence the first.
- Opportunity — combined duties: the same person selects the supplier, agrees the price and accepts the result.
- Motive — personal circumstances an employer usually does not know about and is not required to.
- Rationalisation — a sense of unfairness: “I am underpaid”, “everyone does it”.
Signals visible without an investigation
- Procurement where one supplier wins for years without competition and alternatives are never considered.
- Regular exceptions to procedure, always explained by urgency.
- An employee who never takes leave and never hands over their area.
- Discrepancies that are plausibly explained every time and never go away.
- Documents backdated “to close the period”.
No single signal is evidence. What matters is a stable combination of them in one area.
The first reaction that ruins everything
The most common scenario: an executive spots a discrepancy, calls the employee in and asks directly. After that conversation the evidence base usually ceases to exist — documents are tidied, versions are aligned, access rights are used one last time.
The correct order is the reverse: first preserve the state of the data and documents, then define the scope of the review, and only then move to conversations — inside a lawful procedure and with notice.
What to do instead
- Limit those in the know to the people who genuinely need to be.
- Preserve accounting system data and source documents as they are.
- Do not change access abruptly — that is the signal after which traces disappear.
- Decide what outcome you want from the review: the depth of work follows from that.
In short
The purpose of a review is not to find a culprit but to reconstruct how the process works and close the opportunity. Conclusions about individuals are a consequence, not the goal, and the decision on them belongs to the employer.
Sources
- Bureau RM practice in corporate and economic security. General information only.