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How to Guard Against Fraud and Embezzlement

 
  Arthur F. Rothberg, Managing Director, CFO Edge, LLC  
   
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  Article Summary  
A sluggish economy like the one we’re now facing has many potential repercussions for businesses: slower sales, less revenue and lower profits, to name just a few.

Another one that doesn’t always occur to CEOs and CFOs is a higher potential risk of internal fraud and embezzlement. The cost of fraud can be devastating to a small or mid-sized business. The median business loss due to occupational fraud over the past year was $140,000, reports the Association of Certified Fraud Examiners 2012 Report to the Nations.

In this article, we discuss the three elements of what Professor David Cressey calls the “fraud triangle”: pressure, rationalization and opportunity. The article also includes steps that can be taken to ensure proper management oversight.

It’s critical that Los Angeles and Southern California CEOs and CFOs implement sound internal controls in order to guard against fraud and embezzlement. Otherwise, they could find themselves the unwitting victim of fraud schemes that could potentially cripple their business. An outsourced CFO services provider can offer valuable assistance by helping spot potential areas of weakness and recommending control measures to shore them up.

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