Preventing Embezzlement: Fraud Detection and Control

Fraud Detection and Control

Ideas on preventing
embezzlement
Knowing the employees: It is necessary to be alert of potential theft such as;
• Apparent and sudden devotion towards work and working late.
• Lifestyles that are above the level of salary
• Strong objections towards the changes in procedures that are associated to
financial inventory or matters related to supply (Schuchter and Levi 2016).
• Drugs and alcohol abuse
• Moonlighting with the materials that are available at the business.
• Evidence regarding compulsive gambling or tenacious borrowing.

Case Study Scenario
Analysis
Separating the Financial Duties:
By separating the financial duties of
Jared, Community Arts Organization
can decrease the opportunities of
fraud. For, Community Arts
Organization separating the financial
duties implies that;
• Whoever cuts the checks must not
sign them;
• Community Arts Organization
should handout the checks that
does not runs the payroll, it is not
using a direct deposit
• Jared should not be allowed to
handle the accounting records or
mails, particularly anything that is
associated to the bank statement

Supervising the
employees Closely:
• Close supervision should be paid
towards the payment, receipt
and preparation of purchase
orders.
• It is necessary to separate the
preparation of purchase orders
of employees.
• Close supervision should be paid
towards use of serially pre-
numbered purchase orders and
constant verification of income
orders must be made (Huber
2017).