Warning Signs of Fraud

  • Unexplained drop in cash flow and profit.
  • Increase in delinquent accounts and bad debt.
  • Employee is defensive, emotional, territorial, protective and/or uncooperative.
  • Employee unexpectedly and dramatically increases his or her personal expenditures, appears to have “come into money.”
  • Slow monthly closings (experts say accounting books should be closed within 10 days of month-end).

Detection of Fraud in Small Businesses


Fraud Victims by Type of Organization


Position of Perpetrator


Tenure of Perpetrator


Percentage of Cases Based on Size of Victim Organization


This article originally appeared in The Business Owner Journal, the periodical of choice for owners of small and midsize private businesses. All rights reserved, D.L. Perkins LLC. © 2012.

This publication is intended to provide general information on the subject matters covered. It is sold and distributed with the understanding that neither the publisher nor any distributor or advertiser is engaged in providing legal, tax, insurance, investment or other professional advice. The advice of a qualified professional should be sought before any reader applies a concept presented herein to his or her particular situation or business.

D.L. Perkins, LLC is solely responsible for this content.


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