Small businesses are hot targets for fraud and recent research indicates that firms with 150 employees or less incur fraudulent activity at 42% versus 29% for larger enterprises. The higher numbers are attributed to the lack of internal controls in small businesses. The major types of fraud activity are payroll fraud, cash fraud and identity theft. Fraudsters are usually motivated by 1) opportunity 2) incentive and or 3) rationalization. As a business owner-you have the most leverage over ensuring that your firm has the appropriate control posture, and management tone to ensure adherence to policies to deter fraudulent activity. Lax commitment to integrity and ethical behavior from senior management can signal to employees that the business environment presents valuable opportunities to engage in fraud.