Phoning it in: Employee phone fraud and abuse

Using the organization's phone for personal benefit is a simple asset misappropriation and a type of fictitious expense scheme. In the ACFE's Fraud Tree, the crime is a subset of fraudulent disbursements, which is a subset of cash schemes. At the end of the month, an entity's phone statement may include both official business charges and personal charges. If managers don't detect the personal charges, obviously the entity unknowingly will pay them and sustain a loss. Phone fraud and abuse occurs when an entity hasn't established appropriate policies and procedures to deter it, to detect it in a timely manner and to stop it before paying phone bills.

INTERNAL CONTROLS FOR PHONES

The entity should establish formal written policies and procedures for phone use and conduct training to advise employees about its expectations. Here are some key elements of these policies and procedures: