Newsletter

Tricks of the Trade

Every day, members of The Sleeter Group’s Consultants Network tackle the day-to-day problems of their clients in the real world. In November, there was a great deal of discussion about fraud and fraud prevention on the "Sleeter Group’s Consultants Network Yahoo Group." Members shared stories of uncovering fraud that ranged from a few thousand to hundreds of thousands of dollars. The following are some of the suggested internal controls that surfaced in that discussion.

Randy Huizenga says, “There are several fraud schemes that come to mind… All of them can be mitigated by the use of strict user passwords and log-in procedures coupled with regular review of the audit trail reports, close management and/or owner review, external CPA involvement, regular review of balance sheets, supporting schedules, timely thorough cash and other account reconciliations, budgetary controls and separation of duties.”

Bob Crook suggested, “It is amazing how creative people can be. Reading these stories and fraud scenarios has been very interesting. I have to wonder how many business owners are being ripped off big time simply because their QuickBooks is not used correctly. I have two suggestions to minimize employee risk amongst business owners that use QuickBooks.

1. The ‘regular’ bookkeeper should never be the one to open the sealed bank or credit card statements.
2. Another fraud prevention strategy is to get a Sleeter Certified or top notch QuickBooks Pro-Advisor to regularly review their QuickBooks at least quarterly and give the owner a full written report. It is a deterrent if a thief knows that a QuickBooks Master Technician is regularly reviewing the books."

Leslie Shiner added, “I appreciate all the comments on potential fraud schemes. I actually uncovered a scheme that lasted 3 years with the bookkeeper stealing $550,000! In fact, I just published an article in the October issue of the JLC Magazine about this very topic.”

Diane Gilson contributed, “I ‘embed’ various anti-fraud steps in the month-end accounting procedures that I incorporate into my implementations and training. They include segregation of duties steps that should be performed by the owner in a small company that only has one bookkeeper (such as having all bank, credit card and loan statements sent to the owner’s home, keeping checks under control and handing off limited numbers to the bookkeeper, initialing check signing logs, actually mailing the checks that they sign rather than handing signed checks back to the bookkeeper, etc.). "

To learn more about Internal Controls and Fraud Reduction, attend Bonnie Nagayama’s webinar on December 18. Leslie Shiner will also be conducting webinars on Marketing and Selling Your Services and Become an Expert Construction Consultant in December.