On Reducing Occupational Fraud Risk in SMEs: Recommendations

Abstract

Objective: To propose recommendations for SMEs interested in reducing the occupational fraud risk.Research Design & Methods: The study is based on an analysis of the relevant literature, reports on fraud, the author’s own preliminary research, and an analysis of court case files pertaining to occupational fraud.Findings: Occupational fraud in SMEs in Poland is largely detected by accident, as a result of a job rotation or changes in internal procedures, whereas the most popular detection method applied by enterprises in general are routine internal audits (as a global report on fraud indicates).Implications / Recommendations: The risk of occupational fraud in the SME sector cannot be completely eliminated, but measures can be implemented to reduce its occurrence. These can be divided into soft measures (taking care of ethics at every juncture) and hard measures (facilitating the reporting of occupational fraud).Contribution: The paper indicates ways of detecting occupational fraud in SMEs in Poland and, based on these observations, proposes recommendations for reducing the risk of occupational fraud in companies in this sector.