By Jack Little, CPA, CFE
Professor of Practice, Dyson School
Director MPS – Accounting Program, Cornell SC Johnson College of Business
Fraud is everywhere.
It affects people, businesses, even religious institutions and charitable organizations, across sectors and industries in unexpected ways. From financial resources to cyber security, the impact of fraud is widespread. In an effort to combat fraud, some corporations have created entire divisions dedicated to fighting and investigating fraud. Yet companies lose an estimated 5 percent of every sales dollar to fraud, according to the Association of Certified Fraud Examiners (ACFE).
If corporate giants have the resources to fight fraud and still struggle to stop it, what does that mean for everyday consumers like you and me?
International Fraud Awareness Week, sponsored by the ACFE, is dedicated to addressing that very question with a week-long campaign that runs from November 12 to 18. The goal is to raise anti-fraud awareness and education and to provide consumers and businesses alike with resources, events, and interactive tools. Fraud Awareness Week is all about creating the beginning of people becoming aware—whether it’s personally, as a manager or owner of a business, or as a consumer.
As a Certified Fraud Examiner, I talk to my accounting students quite a bit about fraud. It will impact all of us in one way or another, usually in ways we don’t expect. We never think it will happen to us. In the cases I have examined, victims of fraud always say, “I never dreamed this would happen to me.” That’s why I want students to be thinking about how they protect themselves and their future. I also ask them to consider how we can fix this so that we can make our world a safer place by helping to keep fraud from occurring.
Here are some actionable steps you can take to protect yourself from fraud.
Practice basic security measures.
Create robust passwords and change them regularly. Don’t share your passwords, and do not keep personal information, such as passwords, routing numbers or bank details, social security numbers, and credit card information, visible or easily accessible. Shredding documents with personal information also adds a layer of protection.
Sign up for credit alerts and identity fraud protection.
Everyone should have identify fraud protection. This is especially important in the digital age, where money is exchanged with the swipe of a button on your phone or your credit card is stored in your smartphone apps. When possible utilize such safeguards such as two-step authorizations to maximize security.
Ensure you are using a secure server during transactions.
When you access your bank account to send or receive funds, your connection should be secure. Don’t use public internet access for your banking transactions, nor send account numbers, routing numbers, or passwords via email.
Use a credit card versus a debit card for your online purchases.
It is a lot easier to question a charge on your credit card that it is to recover cash already deducted from your checking account.
When it comes to protecting a business, managers and leaders of the organization set the tone. If management isn’t aware of the risks of fraud and taking appropriate actions, it’s difficult to get employees thinking about protecting the company from fraud. At Cornell, we receive emails and education to make fraud awareness a priority, with information and opportunities to educate students, faculty and staff, and the community at large.
I try to remind our students that as they prepare to enter the business world, only a few will work in accounting but every single one of them will manage something—a project, a business, people—and it’s incumbent of a manager to ensure controls are in place so that these instances of fraud don’t happen. The only way to create the procedures necessary is to be knowledgeable about both the risks and the safeguards.
At the end of the day, you don’t have to be an accountant to take steps to protect yourself and others against fraud.
Join Professor Jack Little, CPA, CFE, in the fight against fraud here.