Spotting And Preventing Accounting Fraud
Look for employees who never take vacation or sick days - Dedication to the job is great but you might want to look closer at the employee who never, ever calls in sick. Same goes for the employee who never asks for or takes a vacation. Could it be that employee "has" to be on the job to keep their fraud scheme going?
Do you have an employee with a sudden and unexplained lifestyle improvement? Maybe that improvement is at your companies expense!
Split up accounting responsibilities when possible - Make sure that your Accounts Payable operation has sufficient checks and balances. No single person should handle all accounting matters.
Also, keep your eyes open for unusual items like these:
Look closely at duplicate payments.
Excessive purchases of unneeded items should draw your attention.
Lots of shipments to PO boxes? Look closer at these.
Weekend or holiday deliver dates on AP invoices should also draw your attention.
Same person sign both the PO and the receipt. That's a red flag!
Consistent preferential payments to a vendor could point to a kickback scheme so look at these closely.
Look for invoices which do not have the folds that come from having been mailed. No folds, may point to potential fraud.
Tax ID numbers on the vendor invoice should help you be more comfortable that the invoice is legit.