Protecting your business from internal fraud

Cohen Greve & Company CPA, P.C.

Fraud for a business

• Do you run a business where there is a trusted employee who handles mail, sends out bills, runs payroll, and orders supplies?

• This employee could be embezzling money from your company

• This employee could feel a sense of entitlement or financial frustration

How to avoid business fraud

• An owner who doesn’t have the time or doesn’t feel it is necessary for them to be involved with the finances of their business can find employees embezzling

• A hands on owner will be able to find if an employee is involved in fraud

• If you are a business owner be aware of the company funds

The first line of defense

• The first line of defense against fraud is an owner who understand the importance of signing checks, watching bank statements, and other financial tasks

• Being actively involved with deposits, financial transactions, and expenses

will help keep your money save

Large Company protection

• Larger companies know that segregation of duties is a beneficial to preventing fraud

• One person can be responsible for accounts receivable and another person for accounts payable

• Separate people should be responsible for receiving, storing, and shipping inventory

Separation of duties

• By separating the financial duties the business owner is reducing the possibility of fraud

• While collusion can take place it will be easier to track because you will know who was in charge of which financial transactions

Look into your own company

• What processes are in place in your accounting department?

• Are there cash reconciliations done each day?

• Are financial statements reviewed by at least one owner?

Accounting process

• Which accounting systems are in place at your company to protect your money?

• Make sure that you are aware of the financial transactions going on and meet with your accounting department regularly

Cash Reconciliation

• Are there cash reconciliations that go on each day at your business?

• Keeping track of your exact funds is crucial to preventing fraud

• Having a system where multiple people are checking each other can help but watch for the possibility of collusion

Does the owner review statements?

• If you are the owner of your business do you review your financial statements monthly?

• Reviewing these documents is crucial to fighting against fraud or embezzlement

• Being aware of your transactions will make you aware if something odd takes place

Protect your money

• Following the previous three financial steps will help prevent fraud at your business

• Fore more information on forensic accounting NYC and fighting fraud check out our website