COLUMBIA, S.C. (July 14, 2020) – One would think that during the COVID-19 pandemic, with people working remotely, coping with home schooling and keeping themselves, their families and colleagues safe, there would be little time for crime. Sadly, the exact opposite is true; fraudsters have been taking advantage of the pandemic’s uncertainty and causing mayhem, says Jessica Kaczor of Bauknight, Pietras & Stormer, P.A. (BPS).
Kaczor, a certified public accountant (CPA) and certified fraud examiner (CFE), is taking this message—along with proven strategies to combat fraud—to the 2020 Virtual TFACC, the premiere national conference for tax, finance, and accounting professionals who work with rural broadband and electric cooperatives and rural companies. The conference, set for August 3 and 4, is sponsored by the National Rural Electric Cooperatives Association (NRECA), NTCA Rural Broadband Association and the National Society of Accountants for Cooperatives (NSAC).
According to Kaczor, small businesses typically lose five percent of revenue to fraud each year, a rate two to four times higher than that of large organizations. Common types of fraud are associated with billing, payroll and payment tampering. With more companies requiring employees to work remotely without supervision, opportunities to “game the system” have exploded.
“One of the primary reasons for this is internal controls that are usually very effective in deterring fraud are circumvented when people work from home,” Kaczor explains. “Home computers are not secured, there’s no boss looking over the employee’s shoulder and checking their work, and there’s also a sense of urgency to do what it takes to get things done rather than following established controlled protocols. Some people will take advantage of the situation because with no one looking, they believe the chances of being caught are low.”
Kaczor says COVID-19 fraudsters generally fall into one of two categories. First, furloughed employees whose work hours and income have been cut and need money to make ends meet may cheat. Second, individuals whose workloads have increased often feel the company owes them more for their efforts.
“Neither is justified, but we shouldn’t be too surprised when people are under stress,” says Kaczor, who works with BPS clients to develop and implement fraud prevention strategies. Her advice—which she will cover in detail at the TFACC Conference as well as with clients and would-be clients—is this: All companies, co-operatives, and associations should re-evaluate their risk assessment and adjust their fraud prevention strategy accordingly.
“As simple as it sounds, notifying your employees that fraud prevention efforts are now heightened as a result of COVID-19 and anyone found to be committing fraud against the company, be it payroll related, fraud with vendors or identity theft, will be prosecuted immediately,” she says. “It’s a powerful deterrent.”
Kaczor adds, “All companies should re-evaluate their risk and adjust their fraud prevention strategies accordingly.”
To learn more about the TFACC Conference or to register, visit this website. To learn more about how BPS can protect your organization from fraud, visit our website.
About Bauknight Pietras & Stormer, P.A.
Established in 1991, Bauknight Pietras & Stormer, P.A. (BPS) is among the Southeast’s premier accounting and consulting firms. The firm was recently named by Forbes as one of the top recommended tax and accounting firms in America, one 227 firms so honored and the only South Carolina CPA firm recognized for both tax and accounting services. BPS serves as a strategic partner to our clients, providing tax, accounting and assurance, and consulting services as well as trust and estate planning. BPS serves a diverse client base in the insurance, construction and real estate, employee benefits, hospitality, manufacturing and distribution, professional services, telecommunications, and technology industries. BPS is a member of Prime Global, an association of private accounting firms. Learn more at www.bpscpas.com.
SCBIZtv is part of the SC Biz News family, serving 100,000 high-level business execs throughout South Carolina. Click for more from SCBIZtv.