William
E. Sheridan, III - VP Operations
Previously
Asked Questions
Any
ideas on how we can prevent fraud?
This
is as tough one. If people really want to commit fraud,
they're going to try. The biggest single prevention,
and many may disagree, is to conduct a thorough background
check prior to offering an individual a position.
Be
very skeptical of application data that can't be independently
verified, and check references (or have them checked
by professionals) closely. Beyond that, the best method
of fraud prevention is the segregation of duties,
such as:
- A
single individual cannot have both invoice approval
responsibility and master file maintenance responsibility.
- Minimize
the need for "emergency" checks that bypass normal
controls.
- Perform
a review of new vendor addresses by comparing
them to the addresses of employees. (You'd be
surprised how many matches you can find.)
- A
single individual should not have both purchasing
and receiving responsibility.
We
understand that total segregation is often not possible
due to the size of the organization. Work with your
audit or internal audit team to make sure you can
maximize your segregation of duties and review processes
in accordance with your personnel mandates.
