How to Nab the Rogues: 10 Fraud Tips

• Break the fraud chain. Although it makes sense to give the most fraud-sensitive work to the most reliable employees, this practice also creates the highest concentration of fraud risk, notes the investigator. To avoid a situation in which a finance executive, for instance, authorizes checks, executes payments, and holds on to supporting documents, have at least two, or even three people responsible for those functions, according to Rechtman. A particularly ripe area for such fraud: wiring cash, which is a situation in which an employee deals directly with a bank with no intervening controls.

• Surprise 'em. At the beginning of a new year or at year's end, company managers should plan when unexpected audits or tests should be done and who should perform them. Internal auditors or quality-assurance employees might be best at this, notes Rechtman, and casinos often use audit firms to perform the function. Sometimes, it's a good idea to discuss the surprise audits beforehand.

•Do it now. It's important to take at least one specific anti-fraud measure as soon as possible in order to battle a false sense of security, given the widespread risk of fraud. "Just reading this list is already a step in the right direction," Rechtman says of the above.

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