Most fraudsters are 1st time offenders and have never been charged with a crime.
The most common types of fraud are billing fraud, check tampering, payroll, and expense reimbursement fraud. Some employees commit billing fraud through paying bills to false vendors or using petty cash to pay for personal expenses.
Check tampering can easily happen when an employee writes a check and forges the endorsement of the business. Employees handling payroll, can simply manipulate the amount he or she is paid or recreate the likeliness of a check. Finally, expense reimbursement fraud occurs when employees submit reimbursements for expenses that never occurred, items that do not need to be reimbursed, or duplicating past reimbursement expenses.
The longer the perpetrator works in an organization the bigger the fraud and you can expect to recover only half of your loss. The best way to prevent fraud is to incorporate strong internal controls:
Small businesses without strong internal controls can easily be taken advantage of by their "trusted" employees. On average, 30% of small businesses affected by fraud lose $140,000-$190,000! But fraud is easily avoidable by using just some of the methods listed above. Many small businesses enlist an outsourced bookkeeper that can help them keep track of these records including bank statements and reviewing journal entries.
- Jim Gruber
Sources:
http://www.acfe.com/article.aspx?id=4294976289
http://kerrbookkeeping.blogspot.com/2012/08/how-to-prevent-fraud-adn-theft.html