The Revenue Drain – That “Sucking Sound” is Lost Revenue: Trust Your Employees…But ALWAYS Verify

Editor’s Note: For more information, download the free, key vulnerability areas which expose your company to risk, revenue loss and decreased ROI.

Dan3By Daniel W. Draz, M.S., CFE, Principal, Fraud Solutions

If you think an Edward Snowden like event will never happen at your company, or that no one will ever embezzle from your company, or use your technology for illegal purposes, you’d be wrong. These kinds of “high profile” employment events happen every day at companies across the globe and when they do, one of the most often asked questions is why didn’t your company take steps to mitigate the risk before it occurred? At that point, the damage is already done and no matter how you try and spin it, there aren’t any really plausible answers.

The Trust Factor

Most people trust their employees to “do the right thing,” some even trust their employees without ever verifying their functional job related activities (blind trust) and that’s usually where most internal problems begin. We all know that trust is earned but that doesn’t negate management’s obligation to verify job related performance or financial transactions. Simply put, employment related trust should never be absolute.

Even long term employees are not beyond fraud, abuse or inappropriate conduct as defined by your employee handbook or Code of Business Conduct. It might surprise you to know that the average embezzler is likely to have worked for your company for 7-10 years.

The Trust Takeaway

What does employee trust have to do with any of these areas? Plenty. Oftentimes, the errant trust we place in employees manifests itself in the “they would never do that” attitude. This mentality is contrary to the administration of robust internal controls which detect inappropriate activities in the workplace. The failure to overcome the trust mentality is usually costly as many companies have found out the hard way.

Today, I’m challenging the entire employee trust notion as a contributor to corporate risk, revenue loss and decreased productivity (ROI). Without putting too much effort into it I can easily come up with 10 internal vulnerability areas (there are certainly more) where issues often arise and your company is more than likely experiencing several of these at the very moment.

 About the Author: Daniel W. Draz, M.S., CFE is the Principal of Fraud Solutions, a global fraud consulting firm located outside Chicago. Draz is a recognized leader in the fraud profession, providing innovative enterprise anti-fraud risk management strategies, insightful observations, fraud training and thought leadership to clients. He works with companies to improve their enterprise fraud risk management efforts and reduce major fraud losses. Connect with us on LinkedIn:, follow on Twitter: @fraudservices or via e-mail:

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