With more than a third of New Zealand businesses being victims of fraud in the past two years, according to PwC’s 2014 Global Economic Crime Survey, Enprise Waikato general manager says it's time for NZ to toughen up.
Culturally, there is quite a difference between the ways that US and New Zealand companies approach fraud prevention, says Enprise Waikato's Kris Schneider.
Schneider is a trained accountant who worked as a consultant for a range of small to medium enterprises in the US before she moved to New Zealand.
“Kiwis tend to be very trusting,” she says. “In the US, the approach is that companies are very proactive in preventing fraud.”
It begins when someone applies for a job. Commonly, a credit check is done – particularly if they are to handle money – and often a police report sought. Today, many employers seek access to the applicant’s social media pages.
“When I came to New Zealand that would never have occurred to an employer,” Schneider says. “However, there has been a shift in the past two years. But you still don’t often see these checks in small businesses.”
The very first thing is to recognise that fraud can happen. “People don’t want to believe that others will steal from them,” she says.
“Secondly, you have to think about the ways that fraud can happen. Then you look at your processes and make people accountable for their results. I’m seeing some changes, particularly around monitoring inventory but not so much in terms of accountability.”
Modern accounting software should allow event recording, where permission is given to. For example, where there’s a change in an account number, someone else should be notified by the system as a safeguard.
But this tends to happen only at enterprise level, Schneider says.
Communication is important. Accounts should be regularly monitored. Sub ledgers, for example, should match the general ledger.
“It’s about staying involved.”
With the correct processes in place, the investment in time to monitor potential fraud is minimal, she says.