Internal Controls Possessed by Small Business Owners

Internal Controls Possessed by Small Business Owners by Stephanie Hobart Weiss MS, Strayer University, 2009 BS, Mountain State University, 2007 Doctoral Study Submitted in Partial Fulfillment of the Requirements for the Degree of Doctor of Business Administration Walden University January 2018 Abstract On average, a small business could lose $150,000 a year due to employee fraud schemes. For most of the small businesses affected by employee fraud schemes, the average $150,000 loss could be detrimental to the small business, causing the business to close. The purpose of this multiple case study was to explore the internal controls small business owners apply to detect and prevent fraud from occurring in the business. The population for the study consisted of 3 small business owners located in Hartsville, South Carolina who implemented effective internal fraud controls in their business. The conceptual framework guiding the study was the fraud triangle theory. Data were collected and triangulated through semistructured interviews, company internal control policy and procedure documents, the Committee of Sponsoring Organizations of the Treadway Commission internal control framework, and the Small Business Administration internal control good practices. Data were analyzed through coding. There were 3 themes which emerged in relation to addressing the central research question: cash collection, separation of duties, and attentiveness and awareness. The findings could contribute to positive social change by providing best practices for smallOn average, a small business could lose $150,000 a year due to employee fraud schemes. For most of the small businesses affected by employee fraud schemes, the average $150,000 loss could be detrimental to the small business, causing the business to close. The purpose of this multiple case study was to explore the internal controls small business owners apply to detect and prevent fraud from occurring in the business. The population for the study consisted of 3 small business owners located in Hartsville, South Carolina who implemented effective internal fraud controls in their business. The conceptual framework guiding the study was the fraud triangle theory. Data were collected and triangulated through semistructured interviews, company internal control policy and procedure documents, the Committee of Sponsoring Organizations of the Treadway Commission internal control framework, and the Small Business Administration internal control good practices. Data were analyzed through coding. There were 3 themes which emerged in relation to addressing the central research question: cash collection, separation of duties, and attentiveness and awareness. The findings could contribute to positive social change by providing best practices for small business owners to mitigate the components of the fraud triangle and subsequently decrease, if not eliminate, fraud from occurring in small businesses. Internal Controls Possessed by Small Business Owners by Stephanie Hobart Weiss MS, Strayer University, 2009 BS, Mountain State University, 2007 Doctoral Study Submitted in Partial Fulfillment of the Requirements for the Degree of Doctor of Business Administration Walden University January 2018 Dedication I dedicate this doctoral study to my husband, Marc, for his continued love, sacrifice, and support during this journey and to my son, Marc, Jr., who makes it all worth it. Acknowledgments I would like to thank Dr. Faint, Dr. Davis, Dr. Dwyer, and Dr. Mayer for your continued mentoring, support, and invaluable feedback. I would further like to thank Dr. Faint for her continued support during this long journey.