These will not protect you 100% against fraud, but they will likely indicate to a wayward employee that financial theft will be discovered. Here are some internal control tips for preventing employee theft and fraud:

1. Drug test every new employee.

2. Run a background check and talk to references on every new employee.

3. Assign the tasks of opening the mail, entering deposits into the books and taking checks to the bank to three different employees, if possible. The person opening the mail should make a list of checks arriving. The list should be compared to the deposit record on the bank account.

4. Review each payroll journal and sign distribute payroll checks. If you delegate that, you have to ensure you delegate to a trusted employee. Ensure you know every employee, if possible.

5. Review bank statements, including enclosures, and reconciliations. If you do not know what to look for, we can help.

6. Review, compare to the bill and sign accounts payable checks.

7. If your business handles cash, bond employees handling cash.

8. Read the general ledger, understand the transactions, and compare the bank account balances to the reconciliations.

The Report to the Nation on Occupational Fraud and Abuse, published by the Association of Certified Fraud Examiners, reports that 7% of corporate profits are lost to fraud. That translates to $994 billion in fraud losses. 

If you would like to increase the level of fraud protection at your company, the Jim Beddow Accounting Firm is able to help. The cost of a fraud is astronomical and one major incident can put a company out of business.  Call us today at 770-218-9722 to schedule a risk assessment for your company.