Note: Running Fridays in FromGregsHead.com, is a continuing series of tips brought to you by Greg Price. These run Saturday mornings during the BusinessMaker’s Radio Show on KPRC 950AM. Audio files can be found on the Entrepreneur’s Playbook™ page of the PKF Texas website.
A recent study from Deloitte Financial Advisory Services has found that bankrupt companies are three times as likely to have been cited for fraud. The study went on to say that companies who are cited for fraud are twice as likely to end up in bankruptcy court.
The study does not make it 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 discuss with their management team.
It’s important that you take the necessary steps to identify the potential for fraud in your company. PKF Texas has a diagnostic survey located on our website at www.pkftexas.com/FraudSurvey which can serve as a starting point to begin a dialogue with your management team.
With the economy the way it is right now, you can’t afford to be losing money to controllable factors like fraud.