Manitoba, Saskatchewan small businesses need to be more aware of fraud: National accounting firm

A national accounting and consulting firm is advising prairie businesses to take fraud seriously after finding many are confident in their ability to prevent it.

The survey, conducted by Ipsos on behalf of MNP LLP, asked 71 Manitoba and Saskatchewan businesses about their experience with fraud.

While 80 per cent of the small group of respondents said they were confident in their ability to prevent fraud, 40 per cent also said they either suspected or knew for certain their business had experienced fraud or scams in the last year.

Greg Draper, a former RCMP investigator and vice-president of valuations, forensics and litigation support at MNP, said the survey was in line with the firm's experience of a "significant gap between actual preparedness and perceived risk."

"I think what it comes down to is most businesses believe fraud is someone else's problem. They recognize that it's an actual issue, they recognize that it may be present in their industry," Draper said.

"But in our experience, and I'm supported by the survey, most businesses think that it's just not going to be a problem that impacts them and the reality is, their colleagues and competitors are thinking the same thing. So sooner or later, someone is left without a chair."

Simple steps to prevent fraud

Draper said fraud is on the rise in Canada, and businesses need to continually revisit their fraud-prevention strategies to make sure they're keeping up with the times.

"They need to be very concerned. It's a growing industry," Draper said. "There's no business that is too small to worry about cyber attacks, for one, and frankly any business that has employees and money needs to be worried about internal sources of fraud."

Draper said common forms of internal fraud include employees padding their expense claims and having improper interactions with vendors and suppliers, such as an undisclosed interest in a company providing goods and services or receiving payments for making preferential purchasing.

From external sources, Draper said cyber fraud, such as phishing schemes and ransomware, is growing "at light-speed."

But he said business owners can take a series of simple steps to safeguard themselves against scams.

"The first and foremost is understanding that fraud is about people telling lies for money. You can dress it up in a whole bunch of different ways from technology issues and accounting issues and business process issues, but at the end of the day it's a people-based crime, and so it can be prevented on a people basis," he said.

"So simple awareness and training amongst your employees is a great first step."

The survey was conducted between Jan. 17 and Jan. 26, 2017. Seventy-one small business owners and executives in Saskatchewan and Manitoba took part in an online, quantitative survey.

The margin of error is +/- 13.3 per cent, 19 times out of 20, had all small business owners and executives in both provinces been surveyed.