The importance of segregation of duties

Perhaps one of the most crucial controls an entity can have is the segregation of duties. Basically, this requires multiple people within a process to complete an objective so that no one is in charge of the process from start to finish. As you begin to think of the different processes within your entity and …

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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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What Can A Small Business Do As Its First Defense Against Employee Theft?

The Association of Certified Fraud Examiners (“ACFE”) reported in its 2012 Report to the Nations on Occupational Fraud and Abuse (“the Report”) that of 1,388 cases of occupational fraud investigated, 87% involved asset misappropriation schemes.  And, it’s not the new employees who are causing the greater fraud losses.  According to the Report the higher fraud …

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Segregation of Duties: Cash

One very important area to focus your efforts on maintaining segregation of duties is within the cash cycle. See below for important areas you may wish to make sure you have adequate segregation of duties within. In regards to processing cash receipts, one should be sure there is adequate segregation of duties among those who: …

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Fraud Alert – Skimming

The Office of the Auditor General recently issued a fraud alert related to skimming, which is a scheme where cash is stolen before it is recorded.  There are two types of skimming; revenue skimming and accounts receivable skimming. The most common and the most difficult to detect is revenue skimming. Revenue skimming involves an employee …

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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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Auditor General Fraud Alert – Billing Schemes

The Office of the Auditor General for the State of Arizona recently issued a fraud alert regarding common billing schemes. The Alert cites a 2010 study done by the Association of Certified Fraud Examiners that indicated most misappropriation schemes involve the theft of cash receipts or involve fraudulent disbursements of cash. The study also indicated …

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