Insights: Article

Amazon is Prime for Fraud

By Liz Johnson

March 27, 2018

For small businesses, Amazon Prime is a no-brainer. Shipping costs are included in the membership and products arrive in two days. This allows organizations to purchase products quickly and easily.

Search. Select items and checkout. Soon your package arrives.

This simple process is also how easy it can be for employees to steal from organizations through online vendors like Amazon.

Continuing with the Amazon example, once a profile is setup and linked to your email, you can add multiple delivery addresses and credit cards, including business credit cards. You can set any credit card as the “default” card for payment which allows you to purchase online or with the app. Since it only requires a couple of clicks, over-purchasing and making purchases unrelated to the business is far too common.

Some business owners review company credit card statements as an internal control measure. However, charges to Amazon may appear to fit within their purchasing policies, allowing fraud to go undetected. Receipts are often not printed and included with statements since many organizations are “going green” or employees simply do not include them.

If employees use a personal Amazon account, business owners cannot easily access their information to review their purchases, whether part of regular review procedures or as part of a response to red flags. However, if organizations require employees to use a “company” Amazon account, then the review process is a breeze. You can export a spreadsheet of the transaction details, including information such as which credit card was used, where it was shipped, who ordered it, the cost and item descriptions directly from Amazon.

If you decide to go with the no-brainer, here are three keys to reducing fraud within your organization:

  1. Require business accounts (whether Amazon or another vendor) that you can access.
  2. Review transactions exports and other purchase information the vendor provides online.
  3. Reconcile the transactions to what was purchased on the company credit card.
3 Keys to Reducing Fraud

Latest Insights

November 16, 2018
Video
If your business sells or operates in more than one state, it’s important to understand the concept of nexus. Depending on how you’re earning revenue, having nexus could impose a variety of taxes, which vary state to state. Learn more in our…
November 15, 2018
Article
Until recently, many businesses weren’t overly concerned about sales tax. They knew they needed to collect and remit in the state in which they resided, but beyond that, their compliance burden was limited.
November 12, 2018
Article
This insight explores what dealerships can expect from the proposed section 199A regulations under tax reform.
November 8, 2018
Article
Are you a business taxpayer with annual gross receipts of $25 Million or less? If so, you may be eligible to take advantage of new Small Taxpayer Safe Harbors that could generate significant tax savings and simplify your tax returns in future years!
November 8, 2018
Article
Considered the most significant tax code overhaul in over three decades, the Tax Cuts and Jobs Act passed in 2017 includes provisions affecting both individuals and businesses.
November 7, 2018
Recorded Webinar
State and local sales tax compliance is always evolving, making it important to stay up-to-date on changes affecting your tax liability and responsibilities. This session will cover what you need to know regarding the recently enacted state and…
November 7, 2018
Article
“Why is my portfolio underperforming the market?” This question may be on your mind.
November 5, 2018
Article
Identify your implementation methodology. There are four practical expedients available. We'll explore each option.
November 5, 2018
Article
Deeper dive into ASU 2016 liquidity.