Business Daily Media

Coco Hou: Accountants must help small business owners to detect and avoid fraud

  • Written by Tess Sanders Lazarus


Accounting and training expert and CEO of Platinum Professional Training, Coco Hou, today said accountants need to play a key role in supporting business owners, particularly small business owners to put in place systems to minimise the risk of fraud.

 

“Accountants need to assist small business owners to detect and avoid fraud,” Coco said today.

 

“Unfortunately, small businesses experience fraud losses at a rate of around 200 times that of larger businesses.   Internal fraud is a big issue for small businesses with more than 50% of frauds involving losses of less than $100,000.

 

“Many small businesses are susceptible to fraud because they lack the necessary accounting controls, usually allocate bookkeeping and accounts management responsibilities to one person, tend to place greater responsibility and trust in people and are less likely to be audited.

 

“Business owners usually start their own business because they have a passion for something.  Many do not have a lot of experience with finances, so they often hire a single person to take care of finances. To make things easier they also give this person access to the bank account.   Fraud happens at small businesses mainly because responsibility is concentrated with one person.”

 

The most common types of fraud in small to medium size businesses include:

 

. Payment of fraudulent invoices.  Fake invoices are raised for non extistant suppliers and monies are paid into an unidentified bank account

 

. Payment of inflated invoices.   Staff collude with suppliers to submit inflated invoices.   These are then paid by the business and staff are given a kick back from the supplier.   
  Unfortunately this a very common scenario.   We saw this recently with the alleged fraud against NAB involving an executive and bank events supplier 

 

. Issuing of fake refunds to customers or clients

 

. Payroll fraud.  Payments are made for overtime or for hours which did not take place.   In some cases, depending on the size of the organisation, fake employees are created in the payroll system

 

. Cash theft.   Skimming of monies for non reported sales

 

. Online payments.  Busy bank accounts which have many transactions are at risk of additional payments being made

 

“All accountants need to be trained to be able to assist business owners to better equip their operations to minimise fraud,” Coco added.

 

“There are some simple things business owners can do.  Firstly, they must ensure all staff are carefully vetted and appropriately trained.  In the case of bookkeeping roles, additional checks must be made to determine the person’s suitability.   Secondly, there must be a separation of duties for roles that involve accounts management and money handling.   Thirdly, regular oversight is essential.  All accounts must be checked and audited on a regular basis to identify the nature of every transaction in a randomly selected period.

 

“Accountants must be trained to probe, identify unusual activities, delve into the detail, and ask the difficult questions.   When it comes to working with small businesses, accountants need to ensure a business is not only well structured and compliant, but also minimising its risk of fraud.” 

 

Coco Hou, is the Managing Director of Platinum Professional Training.   Platinum is one of Australia’s largest accounting training and internship providers with offices across all major Australian cities.  Coco Hou is also a CPA qualified accountant and Managing Director of Platinum Accounting.

 

www.ppt.edu.au

www.cocohou.com.au

Business Today

Cathay Pacific 2021 Sustainability Report

New commitments in carbon neutrality and diversity, and supporting the Hong Kong community during the pandemicThe Cathay Pacific Group has released its annual Sustainable Development Report that addresses its commitment and prog...

Cozycozy, is tackling consumer manipulation in the travel industry

With its user-centric algorithm, Cozycozy fights against the Online Travel Agencies' rampant manipulation of consumers’ choices. In 2019, 112.3 million domestic trips and 11.3 Million international trips were taken by Austral...

Foreign companies exiting Russia echo the pressure campaign against South Africa's racist apartheid system

McDonald's is leaving Russia after three decades of operating there.Sefa Karacan/Anadolu Agency via Getty ImagesMcDonald’s provided many Russians with their first taste of capitalism three decades ago. Now, the global fast-f...

Jennifer Westacott's interview with Ross Greenwood

Ross Greenwood, host, Business Now: Joining us is the chief executive of the Business Council of Australia, Jennifer Westacott. Jennifer, many thanks for your time as always. Quite clearly the government is setting out its age...

Business success as Aussie kids skateboard brand, Ookkie, launches in UK and Europe

Australia’s leading kids skateboard company, Ookkie, has set the wheels in motion for global business success, expanding into two new overseas markets thanks to growing demand for its products from ‘skateboard loving paren...

How a sustainability index can keep Exxon but drop Tesla – and 3 ways to fix ESG ratings to meet investors' expectations

Tesla CEO Elon Musk, shown at an electric vehicle factory, called ESG ratings 'a scam' after an index dropped Tesla. Maja Hitij/Getty ImagesA major stock index that tracks sustainable investments dropped electric vehicle-maker Tes...

Business Daily Media Business Development

Cathay Pacific 2021 Sustainability Report

New commitments in carbon neutrality and diversity, and supporting the Hong Kong community during the pandemicThe Cathay Pacific Group has released its annual Sustainable Development Repor...

Business Daily Media - avatar Business Daily Media

Cozycozy, is tackling consumer manipulation in the travel industry

With its user-centric algorithm, Cozycozy fights against the Online Travel Agencies' rampant manipulation of consumers’ choices. In 2019, 112.3 million domestic trips and 11.3 Million i...

Business Daily Media - avatar Business Daily Media

How to talk to your employer about trauma

Chanintorn.v / ShutterstockThe impact of trauma and post-traumatic stress disorder (PTSD) is a hidden chronic mental health issue in the workplace. A 2016 survey of UK adults found that one ...

Stefanos Nachmias, Principal Lecturer and Deputy Head of HRM Department, Nottingham Trent University - avatar Stefanos Nachmias, Principal Lecturer and Deputy Head of HRM Department, Nottingham Trent University

Jennifer Westacott's interview with Ross Greenwood

Ross Greenwood, host, Business Now: Joining us is the chief executive of the Business Council of Australia, Jennifer Westacott. Jennifer, many thanks for your time as always. Quite clear...

Ross Greenwood - avatar Ross Greenwood

Business success as Aussie kids skateboard brand, Ookkie, launches in UK and Europe

Australia’s leading kids skateboard company, Ookkie, has set the wheels in motion for global business success, expanding into two new overseas markets thanks to growing demand for its ...

Business Daily Media - avatar Business Daily Media

world's biggest port is returning to normal, but supply chains will get worse before they get better

Shanghai is slowly emerging from a gruelling COVID lockdown that has all but immobilised the city since March. Although Shanghai’s port, which handles one-fifth of China’s shippi...

Sarah Schiffling, Senior Lecturer in Supply Chain Management, Liverpool John Moores University - avatar Sarah Schiffling, Senior Lecturer in Supply Chain Management, Liverpool John Moores University



NewsServices.com

Content & Technology Connecting Global Audiences

More Information - Less Opinion