There is no month that passes that you will not hear the news of an accountant stealing from his or her company. You can confirm this by subscribing to Google alert. You will be surprised at the amount of alert you will be getting in relation to situations where qualified accountants have stolen money from the company they work for. The amount usually involved are millions of pounds or whatever currency in use in the country.
The question now is, what are companies doing wrong that permeate this accounting fraud by accountants that are supposed to be fraud fighting professionals? This article is an attempt to identify the reasons why accountants steal money and other valuable assets from the companies they work for. The points identified here are based on the views of some practicing accountants in Glasgow, UK- that however does not make the factors non-universal in any way.
EIGHT FACTORS THAT MAKE ACCOUNTANTS STEAL
Below are some reasons why accountants often steal from their companies. Note that this is by no means an exhaustive list of what make accountants commit fraud, but is a good indication of motivates accountants to steal.
- LACK OF FUNCTIONAL INTERNAL CONTROL: technically speaking, the main reason why fraud occurs in organizations is the absence of fully fledged internal control. A lot of corporations still haven’t fully appreciated the importance of internal control.
- LACK OF FREQUENTLY UPDATED ASSET REGISTER: it is very difficult for resources to be fully monitored when asset register is not regularly updated and checked.
- GREED: greed is the main motivation for committing fraud and to be defrauded.
- ECONOMIC OR FINANCIAL CRISIS: the financial pressure and the fear of being downsized is also a factor that makes accountants steal from their company.
- POOR SALARIES: most people that participated in the survey pointed out that the poor salary scale of accountants significantly contributes to being doggy with financial dealings.
- USE OF OBSOLETE TECHNOLOGIES: most companies where accountants steal money are guilty of deploying old-fashioned technology. The use of outdated accounting software for instance gives that accountant enough room to manipulate figures.
- NON-POSSESSION OF ACCOUNTING SKILLS BY TOP MANAGEMENT TEAM: people that occupy the managerial position of most companies do not have the basic accounting skill. This shows that most people that run businesses do not appreciate the importance of accounting knowledge when it comes to fraud fighting.
- ACCOUNTANTS FEEL THEY HAVE MORE ACCOUNTING KNOWLEDGE THAN OTHERS: accounting staff in most organizations feel that other staff members do not posses enough accounting knowledge and skills to discover their manipulation of figures.
HOW TO REDUCE THE NUMBER OF INCIDENCE WHERE ACCOUNTANTS COMMIT FRAUD
Like every other problems in life, the starting point to solving them is to identify the causes which we have been able to do in the first section of this article. Once the problems are identified, the most rational thing to do next is to take corrective actions needed to right the identified wrongs. Hence, the first step that every company must take in order to tackle the problem of accountants stealing from them is to set up a robust internal control. There are professionals like Information Systems Auditors whose main duty include conducting an internal control audit to check for loopholes in internal control that can help check not just accountants but other staff members.
Also, frequently updating the asset register of your company will assist in monitoring the movement of your resources and this will help prevent accountants from committing economic crime.
Next is to regularly organise workshops where staff members get loads of moral teachings. Though this might be argued by some, but, research has shown that people tend to have better resistance to the temptation stealing when they are constantly fed with ethical and moral input. This is why leading business schools now incorporate one or two courses where moral issues are discussed.
Upward review of the salary of accountants will help in reducing the motivation to steal. In as much as some accountants are handsomely paid, some accountants are still living a life of hand-to-mouth. Resolving this issue will go a long way in helping corporations put an end to frauds perpetuated by accountants.
Businesses should learn to leverage on the enormous power of technology in order to combat unacceptable use of resources within the entity and beyond. It is obvious that most companies still underestimate the importance of accounting software when deliberating on how to safeguard assets.
Training staff basic accounting is a positive step in the right direction that has over the years proven to be effective in reducing the amount of fraudulent acts going on in an organization. At the minimum, financial accounting and management accounting knowledge should possess by top management staff. This will not only help them prevent frauds but, will also help them perform their management functions like: short term planning, organization, strategic planning, coordination, decision making, risk assessment, budgeting, investment appraisal, staffing (human resource) etc.
Above all, educating the staff members of a company is the best way to curb fraudulent activities. Ideally, every worker in a business setup should be trained to be in a position to blow whistle when any suspected activity is discovered. Investing few Pounds or Dollars to train your workforce is a good investment that good managers never take lightly. Those that have the answer to the question; what is investment really understand that safety of asset and money is the pillar.
Let us all stop the recurrence of accountants stealing money and other valuable assets from organizations. It does not take much; all that it takes is the commitment to do so.
To the safety of your cash!!