ABSTRACT
Even the smallest businesses can institute measures to prevent embezzlement, such as creating an internal audit system and dividing up critical financial responsibilities. Some additional tips to protect against embezzlement are:
Cross-train personnel and have them alternate in sensitive positions.
Do not let one employee control every step of a transaction.
Require double signatures on checks.
Keep checks locked up.
Do not sign blank checks.
Review bank statements and canceled checks.
Pre-number checks, invoices, billing statements, purchase orders, or receipts. Account for any missing numbers.
Review payroll records and watch for unknown names.
Perform spot checks on inventory.
Review the list of suppliers.
Review each employee's work or expense reports.
Make employees take vacations, and have someone else perform the vacationing employee's duties.
Be sure that the employees who receive supplies and goods are not the same ones who order them.
Examine bank deposit slips, if you did not make the deposit, and get duplicates or other documentation from the bank of the amount deposited.
Have an outside accounting firm verify your accounting system and check it for possible weak areas.
Be sure there is proper computer security. For example, ensure that employees cannot access financial data from home. If an employee is terminated, immediately lock him or her out of the computer system.
