Do you have a business, and you’re suspecting your assets are missing? Misappropriation of assets is a common problem in business, and most employers are unaware that some of their resources are getting stolen. However, as an employer, you must look for ways to mitigate the risk of an asset and financial misappropriation. Such a game plan will require you to be vigilant to avoid loss and ensure that those who have abused power are held accountable for their actions.
Misappropriation of assets is when employees or third parties use their power to engage in fraudulent activities. Even though all employees and third parties can misappropriate assets, the accounting department is usually held accountable. The accounting department is usually responsible for fraudulent activities because they work directly with funds and financials. So, if you have a business, extra efforts should be directed to auditing to ensure the misappropriation gets investigated in time.
This article will provide you with vital information on dealing with misappropriation issues in your business.
Signs That Your Employees Are Stealing Assets
It can be easy to detect when your employees are misappropriating assets because of several warning signs. Obviously, if they’re living beyond their means, when they don’t want to share work duties with other employees, being unnecessarily defensive, unwilling to take vacations, and signs of addiction. When you notice such behavioral red flags, you have to seek advice from external auditors. After extensive investigation and they’d be proven guilty from misappropriation of assets, you’ll have to engage with an attorney to file the law suit. If you’re unsure where to start looking for a lawyer to legally assist you with misappropriation issues, you could start looking for the nearest law firm on your area or visit a law firm website, like www.themyerslg.com online.
How Can Asset Misappropriation Be Avoided?
When assets get misappropriated, it’s done skillfully that you won’t notice if you don’t look closely. Such a tricky position means that you must employ clever methods to eliminate such abuse of power by employees in your organization. There are two approaches in dealing with asset misappropriation, these are risk assessment and internal control implementation.
You’ll be able to identify the areas of your business that are vulnerable to fraud by using risk assessment. You’ll be able to strengthen these vulnerable areas once you’ve identified them because there’s no way to solve a problem you don’t know.
Areas typically vulnerable to fraud include those with no segregation of duties and a lack of management oversight. In such cases, you may need to consider restructuring your business hierarchy so that all financial decisions must pass several departments for approval, and any asset misappropriation that could occur would necessitate collusion. Thus, making it very hard for someone to commit fraudulent acts that easy.
Other Internal Measures To Prevent Asset Misappropriation
- Create Company Policies To Help Employees
Setting policies to safeguard company assets is one method to use if you’re dealing with misappropriation issues. These policies could include how employees should secure company assets so that if anything goes wrong, the person in charge can be held accountable.
Holding individuals accountable for any missing or broken assets ensures that employees take proper care of the company’s assets. As a result, they’ll be limited and cautious about stealing company gadgets for personal use because they know they might be held accountable if anything goes wrong. This is a good preventative measure for dealing with misappropriation issues.
- Carry Out Thorough Supervision and Audits
If you own a business, you should consider prioritizing team member supervision. Team member supervision includes ensuring that all policies are being followed to avoid gaps in the security of your assets.
Audits should also be performed to the highest standards. Internal auditing is an activity designed to add value and improve an organization’s operations. Its function includes discerning, preventing, and monitoring fraud probability and documenting those risks in the investigations. There are clear actions that auditors are already taking to improve the audit to detect fraud.
Misappropriation is typically carried out by people who understand how to cover up for the crime they commit. With that said, businesses should take precautionary measures to address these fraudulent acts, such as watching out for red flags and being strict in auditing. Your auditor plays an important role in this issue, they should know how to conduct effective fraud investigations to save your company, time, money, and stress. This article will enlighten you on ways to handle misappropriation issues within your company.