There’s been a couple of horrific examples of employee fraud over the past couple of years. I was blown away when I read details of the cases involving Clive Peeters Electrical and Hastie Engineering. I think they are worth considering further as the technique used by the employee involved was similar and both involved amounts over $20M!! There is a weak link within the Australian Banking system which allows you to pay someone by eft without the correct “Account Name.” In these cases supplier or wage payments were setup with the correct payee name but the bsb and account details were actually those of the fraudulent staff member.
Having 2 signatories will not pick this up unless the 2nd signatory independently checks the bank details of the payee. We recommend never using EFT payments. There is no need to as there are so many other secure methods of payment available these days with built in security utilised by bookkeeping software such as MYOB, QuickBooks and Xero.
While unreconciled bank accounts or suspense accounts are a red flag to an accountant, at a recent CPA conference a Scotland Yard Fraud Investigator talked about some more subjective warning signs to watch out for if you suspect employee fraud. Be wary if you have a staff member who never wants to take holidays or sick leave. Taking a holiday may mean that someone else will have to do their job while they are away and come across what they have been up to.
Another sign is that the staff member may show no interest in promotion or pay rises- they prefer to stay where they are. These are simplistic indicators and can obviously be quite innocent, but if there are other warning signs it may be worth digging a bit deeper. Outsourcing your accounts and bookkeeping to a member of a CPA Australia will ensure that you are covered up to a limit by their compulsory Professional Indemnity Insurance.