Any business owner should make sure their business is not at risk for fraud, theft or corruption. A risk assessment is the process of identifying, analyzing and evaluating any potential risks that might cause the company harm. It also involves what measures and procedures are needed to control and protect the company as well as its employees.
How does it work?
- We assess what the risk areas are by going to the premises and going over all the procedures, documentation and processes of how the company functions on a daily basis, this also includes consulting with staff and management in all departments;
- We analyze all information gathered and identify the risk areas;
- We write a report which indicates all risk areas with a recommendation on what should be done;
- We write new procedures and documentation to cover any vulnerable areas in the documentation, process etc.;
- We explain how the new practices and documentation must be implemented.
When must it be done?
- Every time the company changes any details such as new products, address changes,
- On a yearly basis to check whether new vulnerable areas have opened; and
- When the company is newly in business.
What are the biggest risk areas?
- Improper documentation and its wording;
- Lack proper authorization procedures;
- Lack of independent checks;
- Lack of physical safeguards;
- Lack of segregated duties; and
- Not following procedures strictly by management and employees.
Benefits of the risk assessments
- Risks of fraud and/or theft are reduced if done properly and followed;
- Prevention of fraud and/or theft; and
- If fraud or theft does occur, it can be traced to the responsible culprit much easier and quicker saving time and money.
Top areas for fraud in small businesses
- Check tampering;
- Revenue skimming;
- Fraudulent invoicing;
- Payroll fraud; and
- Vendor billing fraud.