Employee fraud has become rampant in all industry sectors in Kenya, causing huge losses and damage to brand reputation and business relations.
Fraudulent schemes are being invented every day depending on the nature of the business, as unscrupulous employees look for opportunities to steal. The most common types of crimes include procurement fraud, cybercrime, accounting fraud, bribery and corruption, and asset misappropriation. The retail sector, for example, is highly affected by the vice, causing some players to panic due to the glaring losses.
Tuskys Supermarkets, a big player in the retail sector, recently fired several managers and general staff on suspicion of fraud. According to Hipora Business Solutions East Africa, retail sector fraud is being fueled by greedy demand for basic and luxury items by consumers and commercial buyers, which is fed by vulnerable supply chains and stores manned by ill equipped, corruptible, and incompetent staff.
Employee fraud threatens the basic processes common to all businesses such as buying and selling, paying and collecting, importing and exporting, growing and expanding, and sourcing and supply chain. Findings published by PwC in a case study, entitled “economic crime survey 2014”, show each business has its own particular risks and threats which arise in relation to job role, responsibility, and seniority of a staff member.
The biggest threat to the business, however, is that owners often do not see the true financial impact of employee fraud until after it has happened. This leads to huge expenses in footing regulatory fines and legal fees. The methods of fraud detection recommended by PwC include data analysis, internal audit, risk management, rotation of personnel, creating a whistle blowing system, enhancing cyber security, and paying attention to investigative media for leads.
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