Are you an Optimist, trusting the good character of new staff? Or trust no-one until they've proved themselves?

The world seems to be divided between the two types, with new owners and managers often falling into the first group.

Employee fraud and stealing is a fact of life in many hospitality businesses - no surprise given the inadequate controls that are often in place.

Basic audit functions like checking till balances and stock-taking are too often done from start to finish by the same people. They are charged with balancing the till at night and making up the float for the next day - a bit like leaving the fox in charge of the hen house!

Food and liquor cost percentages are never accurate because proper time is not devoted to them, or the number skills (eg calculating percentages) of the manager are inadequate.

As a wake-up call, have a close look at the danger signs below. In my experience much fraud and theft occurs in restaurants and bars because of hopelessly inadequate controls and owners who seem to be in a trance about the robbery that's happening right under their nose. Too stressed and too tired to care.

In his book The Dark Side of Behaviour at Work: Understanding and Avoiding Employees Leaving, Thieving and Deceiving, author Adrian Furnham lists these 12 danger signs in staff behaviour - do any look familiar?

• Rewriting records for the sake of 'neatness'.

• Refusing to take vacations and never taking personal or sick days.

• Working overtime voluntarily and excessively, and refusing to release custody of records during the day.

• Unusually high standard of living, considering the salary.

• Gambling in any form beyond ability to withstand losses.

• Refusal of promotion - prefer to stay where they are.

• Replying to questions with unreasonable explanations.

• Getting annoyed at reasonable questions - 'don't you know how hard I work, and the extra time I put in to this job!?'

• Inclination toward covering up inefficiencies and mistakes.

• Pronounced criticism of others (to divert suspicion).

• Frequent association with, and entertainment by, a member of supplier's staff.

• Excessive drinking or associating with questionable characters.

There are also lots of 'nice' terms used to describe theft: shrinkage, 'allowable waste', 'unders', discrepancies, over-rings etc. How do you describe it?

It all starts with the culture you create, and 'culture' exists whether its acknowledged or not. If the boss grabs $50 from the cash register when she goes out for lunch with friends, it's harder for her to criticise staff when the till doesn't balance another time.

Do rewards flow for honesty, or is it 'cool' to break the rules? If a staff member wanted to alert you to fraud, how easy is it for them to do this?

Honest people become distressed when working in a dishonest environment - it may be why some staff have quit for no apparent reason. They genuinely did not enjoy the surroundings.

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