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March 2009 from Bennett Gold Business Bulletin – “When times get tough it seems that the hidden criminal element in people may come to the forefront and employee fraud increases…”
180 View (written by Esther Friedberg Karp) – The article identifies various types of employee fraud, as well as 10 steps to prevent them. The steps all have a common element: common sense should prevail. Therefore, there are many steps that can be taken that did not make this list. For example, never let the person who writes the cheques be the one who reconciles the bank accounts. Also, arrange for employees to share and switch duties so that they can cover for each other in case of illness or absence (and so that employees can spot unusual work done by others). But most importantly, especially in a small business, the owner should not be hands-off when it comes to cash: the owner should be trained in the use of the accounting software, and should review bank statements, cancelled cheques, credit card charges, as well as source documents for payables, receivables and government remittances. I have met small business owners who depended solely on others for all these functions, without doing their own check-ups. They were defrauded by employees (including family members) and trusted bookkeepers.
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