Mitigate fraud

“Trust, but verify.”

“According to the Association of Certified Fraud Examiners, fraud in the United States is approaching $1 trillion per year. Small to medium sized businesses are especially vulnerable to fraud because their cash-related functions often are the responsibility of a single employee.

“Business owners should take an active role in mitigating fraud in their companies. The following are some measures that could be implemented to mitigate fraud at your company:

To the extent possible, separate the duties of receiving funds, disbursing funds, writing checks, signing checks, and reconciling bank accounts.

The monthly bank statement should be delivered unopened to the owner, who should review it for unusual transactions, such as unknown wire transfers and ACH transactions.

Owners or authorized check signers should review the physical cancelled checks or online check images for questionable payees, signatures and endorsements.

Insist that employees take a vacation for at least one week every year and use that time to have their work done by others to discover potential discrepences.

Access to accounting, personnel and vendor computer files should be password protected and restricted by job function.

The accounting software should have the “Audit Trail” feature turned on.

Destroy all signature stamps.

Discuss fraud mitigation tools with your bank’s treasury management person.

Review your insurance policy with your agent and or attorney for fraud coverage.

“If you suspect fraud, strongly consider an independent investigation by a Certified Fraud Examiner (CFE).”