By Matthew Leslie (San Diego CPA)
One of the largest Accounting firms in the United States “KPMG” conducted a “Fraud Survey” and found that businesses are reporting more experiences of fraud than in prior years and that three out of four companies have uncovered fraud.
There are many ways to ensure your business assets are safeguarded, but the following are seven of the methods most widely used as follows:
1. Using a system of checks and balances to ensure no one person has control over all parts of any financial transaction.
2. Having your bank accounts reconciled and checked by an outside professional accounting firm every month, which would include having them spot check cleared checks on a random basis.
3. Restricting the use of business credit/debit cards and verifying all charges made to ensure they were business related.
4. Ensuring business assets such as vehicles, cell phones, equipment, and other company resources are used only for official business and having the internal controls to check them on a regular basis.
5. Protecting business petty cash funds and other cash funds.
6. Protecting checks against possible fraudulent use by implementing good internal controls.
7. Putting in safeguards to avoid and discourage any possible related party transactions.
There are many other areas that also need to be considered here, but for this short article, we just want to emphasize the importance of internal controls to be established, as the potential for loss is significant if there are no checks and balances in place.
Of course, the best ways to prevent fraud and safeguard business assets is to have an accounting professional come out and access your current accounting system and then make recommendations to ensure that your assets are protected and safeguarded against any possible weaknesses in the system.
One other thing to consider is that when you have the same person do the same job for more than few months without any oversight, they are much more likely to be tempted. That is why banks and similar businesses switch out positions so that no one person has been in the same position for too long a period without good internal controls and oversight, etc.
If you would like to set-up a meeting to discuss how we can help, please give us a call. The initial consultation is free and you will be meeting with an experienced and knowledgeable Certified Public Accountant. Give us a call today at 619-464-1014. You’ll be glad you did.