Hotel Employee Fraud and Abuse

The Need for Hotel Internal Audits

The "ACFE Report to the Nations 2020 Global Study on Occupational Fraud and Abuse" key findings:

How is occupational fraud initially detected?

Despite the increasingly sophisticated fraud detection techniques available to organizations, tips were the most common way occupational frauds were discovered.

Second, is Internal Audit!

The data shows that there are clear opportunities for small businesses to increase their protection against fraud. Adopting a code of conduct and an anti-fraud policy, having managers review the work of their sub- ordinates, and conducting targeted anti-fraud training for employees and managers are all measures that are correlated with significant reductions in fraud losses, yet each was implemented by fewer than half of the small businesses in the study. Each of these measures can typically be implemented without requiring a significant investment of resources and could help improve the anti-fraud environment of a small organization.

Internal control weaknesses that contribute to occupational fraud:

• Lack of internal controls 32%

• Override of existing internal controls 18%

• Lack of management review 18%

A lack of internal controls contributed to nearly 1/3 of frauds.

Typical fraud case lasts 14 months before detection, and causes a loss averaging $8,300 per month.

The presence of anti-fraud controls is associated with lower fraud losses and quicker detection.

Add Covid to this equation, economic hardships, deep cuts in staffing and very little adherence to standard operating procedures, is an environment rich with opportunities for employee fraud.

The need for hotel internal audits has never been greater!

Internal Audits play a key role in minimizing the potential occurrence of fraud. Our auditors have considerable experience in understanding potential weaknesses in hotel operations, and instituting internal control procedures to minimize the occurrence of potential fraud.