Part of actively seeking out fraud within a company involves the active monitoring of employees. Yesterday we talked about using computerized data analysis to help identify potential fraud. This is the “what,” as in what we are monitoring and what might indicate suspicious activities. Monitoring employees helps us identify the “who,” as in who might be engaging in questionable behaviors.
The most important caveat when discussing the monitoring of employees is that it must be done ethically and legally. Management must seek legal counsel to advise them of what is permissible in their state. Employers tend to have some latitude in monitoring employees because the company owns the workplace and the equipment used by the employees, but certain expectations of privacy do still exist at work and so the law must be carefully observed.
Traditionally, companies have monitored employees with security guards and strategically placed security cameras. As technology has developed, it has also become commonplace for employees to use keycards that restrict access to certain areas of the company and log employees going in and out of areas.
Systems are also available to monitor computer usage, including internet browsing, emails, and instant messages. Some software will mine data transmitted by employees, searching for certain keywords or other suspicious activities.
For example, a company that is highly dependent upon the development of patents and other intellectual property may monitor outgoing emails to be sure that employees are not communicating the company’s plans to outsiders. Companies may also be interested in monitoring the files that employees are emailing outside of the company, in order to determine if they are sharing private or proprietary information with others.
It is common for companies to maintain logs of computer activities such as logging in and out, and accessing or changing digital records. From those logs, it is possible to see who is accessing the computer system, when the access occurs, what is looked at during the session, and when an employee logged off.
This could be important information, particularly if transactions and adjustment are entered into the accounting system in the middle of the night, when all employees should be sleeping. Or if employees are remotely logging in at odd hours, when they really should only be accessing the system during regular working hours. What if an employee attempts to log in from his home, but he is trying to use the login and password of a co-worker? The company might have an employee who is attempting to access records without authorization or make suspicious changes to the records.
Unusual activity by employees is often just that: unusual activity that happens to occur for a variety of innocent reasons. Yet it’s important for management to keep an eye on these things for the protection of the company, its employees, and its assets.