Top 5 Fraud Detection Strategies by Ca Manoj Pahwa

by Manoj Pahwa Ca Manoj Pahwa

We, as humans, have always been tempted by the “more” factor; more money, more vacation time, or more credit for our work. Such temptations sometimes drive many employees to commit fraud. Perhaps they feel like you owe them. Perhaps their arrogance is driving them to believe that they are above your applied rules. Or perhaps, they are under immense financial pressure to not consider the consequence of their act. Whatever the reason is – fraud is fraud – and it should be detected before it magnifies and destroys your business.

CA Manoj Pahwa has had a brush with such employees. As a consequence, the delved deep into the psychology of his employees to come up top 5 fraud detection strategies. This article is him sharing it with you. So that you can save your business just like he did, in a nick of time.

Techniques to detect fraud and sometimes prevent it.

Prevention is always better than detection. But, fraud is one of those conniving criminal acts that have the habit of slipping under the radar many times. Therefore, Manoj Pahwa and his team of Chartered Accountants believe that being vigilant is not enough, you have to be a bit paranoid as well.

1. Know your employees: It’s often hard for big companies to watch over their employees. Hard doesn’t mean undoable. Therefore, as a top manager, you shouldn’t be afraid to get close to your employees and understand their professional needs. Check for cues in the behaviour and you will start to notice oddities if there is a fraud risk:

a. Some employees might start yelling at you if they don’t feel appreciated.

b. Some employees might be working way too ferociously – it does not always point to their loyalty, it might point to their financial conditions.

2. Setup a reporting system for the employees: Chartered Accountant Manoj Pahwa and his associates have developed a reporting system. Through it, any employee can anonymously inform the top management of any fraudulent act that’s happening within a company. These “snitches” are then rewarded discreetly. It motivates them to work towards the same goal as you do – the benefit of the company. Other ways to do so are as follows:

a. Make a repo with your most trusted employees and given them the role of overseer.

b. Inform no other employee about it and make the overseer sign a NDA (Non-disclosure agreement).

3. Monitor the number of vacations taken by the employee: Having an employee who takes no vacation is a dream of any company. However, such an employee shouldn’t always be trusted. Vacation time allows employees to decompress and it’s beneficial for the company in a long run. Therefore, watch out for the employees who have yet to take a single day of vacation, they might have something to hide.

a. For jobs that require vigilance throughout the office hours and beyond, rotate the employees.

b. The above will allow the second employee to report any fraudulent activity committed by the first.

4. Don’t micromanage: Regardless of how vigilant you are or how invasive you can be in your employees official activities, you should always stay away from micro-management. It deters their productivity and some of your employees would deliberately commit fraudulent acts just to smite you. When I said the paranoia is required a bit, I didn’t mean being intrusive to your employee’s work. Not micromanaging is a way to prevent fraud, a passive way that is. It will:

a. Help you understand your employees better.

b. Make you result oriented – giving your employees freedom to conduct their work – giving you their loyalty.

5. Hire experts to deal with fraud detection: As an accounting professional, CA Manoj Pahwa has a deep understanding of the nuances involved with fraud detection. He, and other financial experts like him can give you a better options for detecting and preventing fraudulent activities. You can hire Chartered Accountants and Forensic Accountants like him and his team to get wide range of services from thorough internal control audits to forensic analysis. Hiring experts will:

a. Give you ample of time to focus on your business.

b. Provide you a better picture of your employee management infrastructure than you could on your own.

Conclusion

Fraud detection requires one to be vigilant and precise. While you can take a closer look at your employee’s activity, you won’t be able to discern any fraud if you don’t get the aid of experts. That’s what CA Manoj Pahwa and Chartered Accountants provide, a way to fish out the fraudsters from your company to provide you a brighter future.