Nobody is safe from the scary reality of fraud. Businesses large and small all over the world are affected by it. Today we bring you five scary facts and what you can do to keep your business safe and your employees, suppliers and customers honest.

1. Big Losses

The average business loses five per cent of its annual revenue to fraud. Now that is scary! For a small business, operating on tight margins, this can mean the difference between survival and bankruptcy.

What to do: Know the red flags of fraud and pay attention to the signs to keep your business safe. Get to know your employees so that you can monitor changes in behavior or lifestyle. Question things that don't seem right, even if they seem minor.

2.Betrayal

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Often it's a company's most trusted employees who commit fraud. Especially in smaller businesses, long-term, trusted employees, who have access to a company's financial statements and records, are the perpetrators of a disproportionate number of the frauds reported.

What to do: Know that people are human and temptation is everywhere. Just because you trust someone doesn't mean they are trustworthy. Make sure you have proper controls in place, including separation of accounting duties, forced vacations and random audits.

3. Long-Term Crime

The average fraud goes undetected for 18 months, and costs a small business an average $147,000. In the latest ACFE Global Fraud Study 20 per cent of the fraud cases caused at least $1 million in losses, points out James Ratley, President of the ACFE. "It's not good business to ignore those numbers," he said.

What to do: Rosanne Terhart,  CFE and Senior Manager at BDO, in her presentation at the ACFE Canadian Fraud Conference suggested having financial statements sent to the personal address of someone not connected to the accounting function to be scanned for irregularities. Other tactics include conducting random audits and implementing an anonymous whistleblower hotline to encourage employees to speak up as soon as they see something wrong.

4.Difficult to Detect

Fraud is so hard to spot that the most common method of detection is by tip, not audit

What to do: Rely on your employees to bring fraud to your attention. Foster an atmosphere of open dialogue and encourage employees to bring any concerns forward. Guarantee no retaliation for reporting wrongdoing and spread this message far and wide. Demonstrate a commitment to non-retaliation and deal severely with anyone who breaks this rule.

5. No Accountability

Many fraudsters are never charged with the crime and continue to commit fraud in business after business. Some companies don't want the accompanying attention and reputation damage that comes with fraud.

What to do: Break the cycle. Discipline, prosecute, follow up. If a serial fraudster has ended up working for you, it's probably because they have succeeded in getting away with it before. When hiring, call references and ask former employers about a candidate's honesty and integrity.

With everything we know about fraud prevention and detection, there's no excuse to not put into place measures to combat it. Don't be part of the scary statistics.