Protect your business from internal fraud

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Workplace crime is the real deal. It involves using one’s job for personal gain through the misappropriation or misuse of employer resources or assets. In other words, internal fraud is a plague.

How can you protect your business from dishonest deeds? Staying vigilant is one option. Learning more about the issue is another way to deal with this situation.


There are a lot of types of fraud around. Let’s take a look at the most common scams... so you can keep them out of your workplace.

Time theft

What about the infamous time theft in the workplace? Simply put: being paid for hours not worked. Both the Act respecting labour standards and the Civil Code agree that an employee must loyally provide their services. Isn’t that what’s usually expected from each and every employee? However, various actions can be identified that lead to time theft:

  • falsifying time sheets
  • leaving early
  • absence without notice or permission
  • extended breaks or lunches
  • napping on the job
  • wasting time repeatedly and unnecessarily

Just to be clear, it’s not considered time theft if an employee has to leave early sometimes. We’re talking about unjustified situations that start to become a bad habit.

Misappropriation of funds

Unfortunately, embezzlement by employees is a reality for many organizations. The misappropriation of funds happens when somebody uses their position to steal money or assets from a company. To put it mildly, it’s an incredible breach of trust.

Generally speaking, these are the three most common types of embezzlement that take place:

  • issuing fake cheques or bank transfers
  • producing falsified invoices
  • creating made-up employees

No business is immune to such shenanigans and must remain vigilant.


All the evidence shows that the risk of finding one or more employees using their privileges for their own benefit instead of the company they work for is... likely. What are the consequences? Why is it best to avoid it?

For business owners

There are plenty of negative consequences for owners. No big surprise that monetary impacts make up part of the equation. While fallout can be hard to swallow, money isn’t everything in life. The harm done to someone’s reputation can be just as serious. Not to mention what it does to the atmosphere at work, which can definitely be affected, and all the other impacts of fraud. Nothing good results from it.

For fraudsters

Honesty is the be-all and end-all. There are serious consequences for those who benefit from fraud. Organizations have every right to fire a dishonest employee. They can also file a police complaint or take legal action. Zero tolerance for breach of trust.


You would no doubt prefer to ‘anticipate’ rather than ‘see’ fraud, and that’s completely normal. Managing the risk of internal fraud is a new practice for many companies. Yet it is not a luxury as it helps to limit the damage.


Power of deterrence

Effective action can be taken and high up on that list would be implementing internal policies and a code of ethics. The act of establishing a policy framework and sharing that with employees is one way to lay all the cards on the table. The different levels of severity of fraud are then available for all to see and there’s a better chance of it being properly understood.

Technological advancements are providing new opportunities for businesses when it comes to detecting fraudulent acts. As fraudsters become more and more cunning, organizations have no choice but to turn to the most modern technologies in order to counter dishonest practices. Biometrics and artificial intelligence (AI), to name but a few, are some examples of effective tools to prevent and clamp down on fraud. And with some solid risk management thrown into the mix.


Whistle-blowing is not for the fainthearted. Nevertheless, information provided by colleagues constitutes one of the most effective ways to fill in the blanks of a fraud case. Setting up an anonymous tip line can encourage employees to report ethical issues on a confidential basis. Those with their hand in the cookie jar... beware!

Stay alert

Do you take into account your employees’ honesty, transparency and morality? Then you should value these truly fundamental qualities. Be on the lookout to make sure that internal fraud doesn’t happen right under your nose at your company...