Last week, AccountingWeb ran a very timely article about the correlation between companies who file for bankruptcy and those cited for fraud.
The article makes the point that it’s not clear whether employees at bankrupt companies are more likely to commit fraud, or whether the microscope of bankruptcy makes it easier for regulators to detect it.
In either case, it is definitely something business owners should be aware of and discussing with their management team. Like I mentioned in my post when we launched our fraud prevention survey, I think it’s important that companies take the necessary steps to identify the potential for fraud in their company. With the economy the way it is right now, you can’t afford to be losing money to controllable factors like fraud.