Everything to Know About Asset Misappropriation Fraud – And How to Deal With This Crushing Issue

It’s one of the unpleasant sides of doing business, but unfortunately, it happens more than we like to think: theft by employees or fraudulent activities such as asset misappropriation fraud are more common than physical burglaries or theft by outsiders. Asset misappropriation fraud is the act of stealing the company’s property or using it for personal gain, with the breach of trust. It’s also referred to as insider fraud.

Handling asset misappropriation fraud certainly isn’t always easy; even if there is overwhelming evidence, there are certain procedures that need to be followed to ensure all the rights of the suspected employee are respected. Here’s everything you need to know about how employees fraudulently steal from organizations – and how to deal with it.

Examples of Asset Misappropriation Fraud

Asset misappropriation fraud is a broad concept and can be committed in various ways. It’s important that the employees and staff understand what it is and what is encompasses. It can include (but certainly isn’t limited to):

  • Creating false invoices or manipulating accounts
  • False expense claims
  • Stealing information or patents
  • Any kind of deception for personal gain

What if You’re a Victim?

Your first instinct might be to call the police or any other authority agency – and that is a perfectly normal reaction. In fact, we should encourage that. However, you need to take a little time and consider this very carefully, because by calling the police or any other investigative agency, you are demanding an investigation conducted by external people.

Again, there’s nothing wrong with calling the authorities, but it is highly recommended that – before you do so – you conduct your own (official or informal) investigation first so you have some evidence (or at least logical arguments) to present.

In an investigation, a proper recording is recommended (but ask permission first), and then have the recording transcribed by experienced transcription services UK. As a company, you should have formal policies in place that deal with such kinds of issues.

Protecting Yourself

asset misappropriation fraud. Image by Angela Yuriko Smith from Pixabay
Asset misappropriation fraud. Image by Angela Yuriko Smith from Pixabay

Prevention is always better than the cure, so make sure that your staff understands what you mean by asset misappropriation fraud, and what your company policies are to deal with it. It’s wise to include such information in the contract and in training, and ensure all employees have a booklet regarding company policy.

It should be clear that asset theft fraud has to be handled right away; not only is it necessary to protect your business from further losses, it’s also important to ensure that this illegal and unethical behaviour does not ‘become the norm’ and take root in the culture of the company.

It’s important that all your employees are aware that such behaviour will never be tolerated, by anyone or from anyone. Asset misappropriation fraud is destructive in more ways than one.

Melissa Thompson
Melissa Thompson writes about a wide range of topics, revealing interesting things we didn't know before. She is a freelance USA Today producer, and a Technorati contributor.