Almost four out of ten business owners in Britain view the possibility of fraud – particularly being ripped off by one of their own employees - as the single biggest threat to their company.
Accountants MacIntyre Hudson found that 38 per cent of owner-managers considered fraud to be the biggest security issue they faced, marginally more than the 36 per cent who were most worried about burglary.
Depressingly, just over a quarter of those worried about fraud were most concerned about the possibility of fraud being carried out by one of their own employees.
But despite this, just four out of ten owners check for irregularities by carrying out spot checks, only a quarter require cheques to have double signatories and just one in ten regularly change the staff who reconcile the company's bank accounts.
And while more than eight out of ten employers say that check the references provided by new employees, fewer than half this number bother to check the legitimacy of academic qualifications or run criminal records checks.
The survey comes as police in London warned that gangs of organised criminals were infiltrating Britain's banking industry and blackmailing employees to obtain customer account details.
Detective Chief Superintendent Ken Farrow, who heads the economic crime unit at the City of London Police said that the problem was exacerbated by the use of unvetted temporary staff.
Howard Lewis, partner at MacIntyre Hudson, said, “ Fraud in the workplace is as common in a smaller business as in a large company. However, for small businesses, it is more difficult and time consuming to undertake the necessary checks.
"Moreover, the close family-type working environment which characterises many owner-managed businesses is often based on mutual trust. Whilst the vast majority of people are honest, this situation does mean that directors can let their guard down and staff can start to abuse the trust that is bestowed upon them.
"We cannot stress enough how important it is for owner managers to foster an environment where trust is combined with vigilance and backed up with robust systems to remove temptation."