Preventing and Detecting Employee Theft and Embezzlement (eBook)

STEPHEN PEDNEAULT, CPA/CFF, CFE, is the founder and Principal of Forensic Accounting Services, LLC, a CPA firm specializing in forensic accounting, employee fraud, and litigation support matters. Steve is the author of Fraud 101: Techniques and Strategies for Understanding Fraud and Anatomy of a Fraud Investigation, and a contributor to Fraud Casebook: Lessons from the Bad Side of Business, all published by Wiley. Steve has also written numerous articles appearing in local and national media, and is a frequent speaker on the subjects of employee embezzlement and forensic accounting. For more information about Stephen Pedneault, go to www.forensicaccountingservices.com.

Preface.

Acknowledgments.

Introduction.

Chapter 1: Hiring the Right Employees.

Disclaimer.

Where Do You Start?

Advice of Counsel.

Application Policy.

Due Diligence.

Personal Information.

Past Employment.

Education.

References.

Criminal and Civil History Checks.

Credit Checks.

Hiring Time.

Notes.

Chapter 2: Know Your Employees.

Why Is Knowing Your Employees Important?

Open Communications.

What Should You Watch for in Your Employees?

Note.

Chapter 3: Sales, Cash Receipts, and Collections.

Here's Where Everything Starts.

Recording and Tracking Sales.

Collections.

Chapter 4: Credit Cards Sales, Transactions, and Merchant Statements.

Processing Sales.

Reconciling Sales.

Processing Refunds or Credits.

Reviewing and Reconciling Refunds or Credits.

Reviewing and Reconciling the Merchant Statement.

Chapter 5: Purchases, Cash Disbursements, Checks, and Petty Cash.

Purchases.

Cash Disbursements/Checks.

Unpaid Bills/Accounts Payable.

Petty Cash.

Chapter 6: Credit Cards and Debit Cards.

Credit Cards.

Debit Cards.

Chapter 7: Employee Expense Reimbursement.

Expense Submission.

Where Are the Abuses?

Payment Processing.

Notes.

Chapter 8: Electronic Banking.

Traditional Banking (In-Person Deposits and Manual Check Writing).

Check Processing and Clearing Changes.

Changes in Bank Deposits.

ATM Machines.

On-Line Banking.

What Can You Do?

Chapter 9: Payroll Processing.

Payroll Administration: Adding/Changing/Terminating.

Payroll Processing.

Payroll Tax Returns.

Chapter 10: Inventory Issues and Controls.

Prevention: Good News and Bad News.

Retail Businesses - Items Available For Sale.

All Businesses - Items for Use by Employees (Supplies, Tools, and Equipment).

Detection.

Note.

Chapter 11: Bank Statements, Cancelled Checks, and Reconciliations.

Bank Statements.

Investment Account Statements.

Cancelled Checks.

Bank Reconciliations.

Chapter 12: Financial Reports.

Generate Financial Reports Regularly.

Why Is the Regular Review of Financial Reports So Important?

When to Consider Outside Advice and Assistance?

Chapter 13: Safeguarding Your Bookkeeping or Accounting Systems.

Manual Bookkeeping Systems.

Computerized Bookkeeping and Accounting Systems.

QuickBooks Users.

Chapter 14: Prevention, Detection, and Insurance.

Timing Is Everything.

Adequacy of Coverage.

Responsibilities for a Claim.

Disclaimer.

Chapter 15: Your Response to an Identified or Potential Issue.

A Dreaded Day of Discovery.

Due Diligence on the Discovery.

What If It Appears to Be Fraud?

Appendix A: Embezzlement Controls for Business Enterprises.

Appendix B: Who Is Lester Amos Pratt?

About the Author.

Index.