Book review: Business Theft and Fraud: Detection and Prevention
Written by James Youngblood CPP CFE, this 327-page book comprises of five sections, which are Internal employee theft and fraud (non-retail organization), Understanding fraud / theft in the franchisee / franchisor industry, Understanding fraud / theft in the retail industry, External Fraud / Theft, and Cyber Security and Cyber Fraud.
The author has extensive experience in the fields of Loss Prevention, Security, Investigations, Law Enforcement and Fraud. He also has authored many articles on the topic of Fraud / Security / Loss Prevention in various national publications.
One of the most interesting sections of this book is the second section; Understanding fraud / theft in the franchisee / franchisor industry, as similar kinds of books rarely address fraud cases in the franchise industry. Franchise business relies heavily on brand name. However, as this business involves many external parties in its operations, it is also highly prone to fraud which in turn can damage the brand’s integrity.
The biggest concern of franchise owners is the accuracy of the sales reports of franchisees. As this is where one of the opportunities for sales underreporting to occur. There are many reasons for individuals to commit this fraud, including greed, curiosity to beat the system, increased franchise fees set by the parent company, and so on. The smaller the amount of income collected by the parent company, the greater the negative impact it will have on the internal operations of the business. Sales underreporting will cause a chain of problems for the business as a whole. This section also explains how to detect fraud with an accounting approach and what franchise owners can do to prevent sales underreporting.
Another interesting part is Cyber Security and Cyber Fraud. On the one hand, today’s business cannot be separated from digital technology. On the other hand, the risk of fraud from this technology is unavoidable. This section emphasizes the importance of companies in educating their employees about cybersecurity and cyber fraud. One of the things described by the author is malware; how malware is the door to fraud, how malware can enter employee computer systems and what employees can do to prevent it, as well as the importance of companies in educating employees about malware.
This book can provide new insights on fraud for owners of large and small companies, fraud analysts, and fraud investigators.