Mike Rosten of the accounting firm Piercy, Bowler Taylor & Kern discussed employee fraud at the latest in NNBW's breakfast series July 27.
According to a case study of chief financial executives conducted by the accounting firm of Piercy Bowler Taylor & Kern (PBTK), a typical organization loses 5 percent of its yearly revenues due to fraud.
By far, the most common form of fraud was through employee misappropriation of funds.
Mike L. Rosten, a certified public accountant and shareholder with PBTK, offered tips on detecting and preventing employee fraud and at a breakfast meeting sponsored by Northern Nevada Business Weekly, titled “When Your Employees Are The Bad Guys! Spotting and Preventing Employee Fraud” July 27 at the Atlantis Casino Resort Spa.
Some of the warning signs of employee fraud he pointed out are living a lavish lifestyle (expensive homes, cars) beyond their pay scale, or on the flip side, indications of financial hardships.
Rosten added that employers, both large and small, in Nevada are susceptible to employee fraud in Nevada, due to the state’s gambling aspect. Employees in authoritative positions or with access to a company’s finances are candidates for employee fraud.
On the other hand, Rosten said there are preventive measures employers can take to minimize the threat of employee fraud.
Most of all, employers needs to have a close eye on a company finances.
“Many business owners or keep an eye on the front door where their customers come in, or on the back with business operations, what products are they selling,” Rosten told the crowd of 72 at the breakfast. “What they need to keep an eye on is the accounting side.”
One cost-effective method Rosten proposed is employee bonding to guard against the threat of fraud and ensure compensation in case an instance occurs.
A few other concepts he added employers can propose is surprise employee audits or proposing mandatory vacation time. He indicated employees who are engaging in misconduct are often reluctant to take time off from work for fear a whistleblower or investigation will occur in their absence.
PBTK is a Las Vegas-based accounting firm that recently established a Reno office. For more information on the firm, go to www.pbtk.com.
NNBW’s next breakfast meeting set for Thursday, Aug. 3, features Doug Erwin, vice president of entrepreneurial development for the Economic Development Authority of Western Nevada (EDAWN).
The meeting is scheduled for 7-9 a.m. at Atlantis. To RSVP, go online at www.nnbw.com.
