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Protecting Your Business from Payroll Fraud: Essential Strategies

ARTICLE | September 03, 2024

Authored by Vasquez + Company


Payroll fraud is a significant risk for businesses that manage employee or contractor payments, often resulting in undetected financial losses. This article, "How to Protect Your Business from Payroll Fraud Schemes," explores recent findings on payroll fraud, including the prevalence of ghost employers and the impact on the IRS's tax gap. It identifies various types of payroll fraud schemes and offers actionable recommendations to safeguard your organization.

Key Points

  • Prevalence of Payroll Fraud: Recent studies indicate that payroll fraud accounts for a notable portion of fraud cases, with median losses reaching $50,000.
  • Types of Payroll Fraud: Common schemes include ghost employees, excessive payments, and payroll diversion tactics used by cybercriminals.
  • Preventive Measures: Implementing robust internal controls, requiring multiple approvals for payroll changes, and conducting regular audits can help mitigate risks.
  • Education and Training: Raising awareness among employees about fraud schemes can significantly reduce the likelihood of falling victim to these threats.

For comprehensive insights and strategies, read the full article here.

 


Our firm provides the information for general guidance only, and does not constitute the provision of legal advice, tax advice, accounting services, investment advice, or professional consulting of any kind. The information provided herein should not be used as a substitute for consultation with professional tax, accounting, legal, or other competent advisers. Before making any decision or taking any action, you should consult a professional adviser who has been provided with all pertinent facts relevant to your particular situation. This article is not intended to be used, and cannot be used by any taxpayer, for the purpose of avoiding accuracy-related penalties that may be imposed on the taxpayer. The information is provided “as is,” with no assurance or guarantee of completeness, accuracy, or timeliness of the information, and without warranty of any kind, express or implied, including but not limited to warranties of performance, merchantability, and fitness for a particular purpose.

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​Vasquez + Company LLP has over 50 years of experience in performing audit, tax, accounting, and consulting services for all types of nonprofit organizations, governmental entities, and private companies. We are the largest minority-controlled accounting firm in the United States and the only one to have global operations and certified as MBE with the Supplier Clearinghouse for the Utility Supplier Diversity Program of the California Public Utilities Commission.

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