Imagine you are driving your car and the engine light appears on your dashboard. What do you do? Ignore it and hope that it is a fluke and that whatever the issue is will go away, or do you take your auto to your mechanic to find out what the problem is and what the cost will be to repair it? The engine light is a reg flag, a warning sign that something is amiss with the engine. There may be an engine light issue or a serious problem that needs immediate attention. Regardless of which one it is, conventional wisdom tells us to pursue the potential problem with the engine.

A business may have red flags, warning signs to let you know if something is not right in your business. If one is aware of the red flags, you should be able to see if you are a victim of fraud. It is important to note that these red flags do not mean fraud is occurring. It means the red flag should be investigated.