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Need to Know: What To Tell Employees About Your Antifraud Efforts


Surveillance is common in many workplaces, yet companies monitoring employee activities may keep the practice under wraps. This may be a mistake because when workers know they’re being watched, they’re generally less likely to be dishonest.

For example, several surveys have shown that clearly visible security cameras discourage employees from stealing inventory.

The challenge is to disclose enough information, without revealing too much.

Frequently Used Controls and Policies

Transparency and trust are the pillars of a healthy, productive workplace. It’s crucial for employees to be aware of the measures we’re taking to prevent fraud. However, it’s equally important not to divulge too many details about our antifraud controls, as this could potentially aid thieves in circumventing them.

Following are a few frequently employed antifraud policies and how you might communicate them to workers:

Surprise Audits. Employees should know that audits can be conducted by skilled auditors without notice. However, they shouldn’t be able to predict exactly when these audits will occur. Make sure no detectable pattern exists (for example, when certain individuals take time off) that would allow dishonest workers to schedule their fraudulent activities.

Internal Fraud Investigations. If your company has a dedicated antifraud group, let employees know what it monitors and investigates. Understanding that trained and dedicated internal fraud investigators work on-site can discourage employees from attempting illicit activities.

Visible Punishment. The fear of being exposed as a crook serves as a deterrent for many would-be criminals. So, it makes sense to prosecute fraud perpetrators and publicize the results of internal investigations. But be sure you don’t include the names of perpetrators or case specifics that could help identify them.

Important: Consult legal advisors about any monitoring or surveillance plans before you begin watching or listening in on employees.

Warning About Monitoring Software

Some companies use software to monitor employees, particularly people who work from home. But be careful if you do this. You must first ask employees to acknowledge that their activities will be monitored. Consider providing examples of the type of information your company can capture, such as a log of the systems accessed and the websites viewed.

Legal formalities aside, studies have found that businesses that treat their employees as untrustworthy risk alienating them. A recent Harvard Business Review article argued that certain controls, such as software that tracks keystrokes or takes screenshots as employees work, can encourage retaliatory behavior, including theft and sabotage. So be sure to choose your fraud-fighting tools carefully.

Destroying the Fraud Triangle

You’ve probably heard of the “fraud triangle” — made up of pressure, opportunity and rationalization. It’s generally considered to be present when someone commits fraud. Although knowledge of antifraud policies doesn’t alleviate pressure to steal, it does interfere with opportunity and rationalization. Employees realize there’s little opportunity to commit fraud and get away with it. And as long as you treat them respectfully and disclose information readily, they’ll have a harder time rationalizing any illicit acts. Contact us for advice on internal controls and other preventative tools.