In the past year there have been numerous reports of fraud and embezzlement, mostly involving small businesses. These can be prevented by a few low cost controls.
One of the most important is separation of responsibilities of asset custody and record keeping for these assets. For example, someone other than the person who receives and disburses cash and writes checks should record these in the accounting records.
Other essential controls include, but are not limited to:
(1) approval of payments by the owner or other responsible person who does not write the checks, or authorize credit card payments and maintain the accounting records. Read more