Don’t give employees opportunity to commit fraud

The term “segregation of duties” is used in the prevention of fraud within an organization. It involves separating duties among employees so that no single staff person is put in an advantageous position to exploit their control for self-gain. A large factor in how someone commits fraud and gets away with it is that they …

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Internal Control Policies Reported on the 990

Lately I’ve received several questions about the policies and procedures listed on page 6 Part VI Section B, three of which are a written conflict of interest policy, whistle blower policy, and a document and retention policy. The concern always seems to be, what if the organization doesn’t have these policies in place? The IRS …

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Internal Control & Outsourcing

What is the first thing that comes to mind when you think of internal controls? Making sure work is double checked? Making sure that the employee in charge of reconciling the bank account does not also receive the mail, sign checks, and reconcile receivable and payable accounts? Segregation of duties is typically one of the …

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Internal Control for Plan Management

Plan administrators are faced with numerous rules and restrictions put in place not only by those in charge of retirement plan regulation, but also as stipulated in the plan document itself. Strong internal controls are essential for the administration of any plan to ensure accurate financial reporting, protection of plan assets and compliance with all …

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Is Small Business Safe from Fraud?

Many small business owners have a feeling of invincibility when it comes to employee fraud.  Their “dedicated” and “loyal” employees would never steal from them.  Or maybe they are just too small to make any theft worthwhile.  The Association of Certified Fraud Examiners (ACFE) thinks otherwise and has the statistics to back it up. Recently …

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Understanding the Control Environment

When trying to deter fraud, most companies focus their time on developing effective internal control procedures and segregation of duties.  Though developing these types of systems are important, a common element of the COSO Internal Control Framework that is often overlooked is the organization’s control environment. The control environment is important to all organizations since …

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Can I Trust My Employees?

“I’m not upset that you lied to me, I’m upset that from now on I can’t believe you” – Friedrich Nietzsche Although trust is a significant factor when maintaining good relationships with your employees, it can be misplaced or abused.   In fact, statistics reveal that acts of embezzlement and theft are frequently committed by trusted …

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Where Should an Employer Look for Benefit Plan Fraud?

Employee benefit plans are often a side note in the day-to-day transactions of a business, lacking the constant oversight and review given to the operational activities.  Also, benefit plans involve the majority of the employees in a company in some way or another.  These and many other reasons make benefit plans susceptible to fraud.  As …

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A Few Simple Steps for Having a Successful Audit

There are some simple steps any entity can take to help make a financial audit as simple and painless as possible.  First, good cooperation between the client and auditor is essential.  Second is the client’s maintenance of a good system of internal controls over the financial activities occurring in the entity.  These things make it …

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International fraud awareness week puts spotlight on fraud

International Fraud Awareness Week is an initiative to raise fraud awareness. Here are some basics that all organizations should follow to prevent and detect fraud, according to the Fraud Week website. Establish a fraud policy  This policy outlines what activities are considered and how they should be reported to management or the board of directors. …

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