Preventing and Detecting Employee Theft and Embezzlement – A Practical Guide

<p>Preface xiii</p>
<p>Acknowledgments xvii</p>
<p>Introduction xix</p>
<p>CHAPTER 1 Hiring the Right Employees 1</p>
<p>Disclaimer 1</p>
<p>Where Do You Start? 1</p>
<p>Advice of Counsel 3</p>
<p>Application Policy 3</p>
<p>Due Diligence 5</p>
<p>Personal Information 7</p>
<p>Past Employment 8</p>
<p>Education 9</p>
<p>References 11</p>
<p>Criminal and Civil History Checks 11</p>
<p>Credit Checks 13</p>
<p>Hiring Time 14</p>
<p>Hiring the Right Employees: Considerations 17</p>
<p>CHAPTER 2 Know Your Employees 19</p>
<p>Why Is Knowing Your Employees Important? 24</p>
<p>Open Communications 25</p>
<p>What Should You Watch for in</p>
<p>Your Employees? 26</p>
<p>Know Your Employees: Considerations 29</p>
<p>CHAPTER 3 Sales, Cash Receipts, and Collections 31</p>
<p>Here s Where Everything Starts 31</p>
<p>Recording and Tracking Sales 32</p>
<p>Collections 44</p>
<p>Debit Memos and Other Adjustments 48</p>
<p>Accounts Receivable 52</p>
<p>Sales, Cash Receipts, and Collections:</p>
<p>Considerations 54</p>
<p>CHAPTER 4 Credit Card Sales, Transactions, and Merchant Statements 59</p>
<p>Processing Sales 59</p>
<p>Reconciling Sales 61</p>
<p>Processing Refunds or Credits 61</p>
<p>Reviewing and Reconciling Refunds or Credits 63</p>
<p>Reviewing and Reconciling the Merchant Statement 67</p>
<p>Credit Card Sales, Transactions, and Merchant Statements: Considerations 69</p>
<p>CHAPTER 5 Purchases, Cash Disbursements, Checks, and Petty Cash 71</p>
<p>Purchases 75</p>
<p>Cash Disbursements/Checks 80</p>
<p>Unpaid Bills/Accounts Payable 84</p>
<p>Petty Cash 86</p>
<p>Purchases, Cash Disbursements, Checks, and Petty Cash: Considerations 88</p>
<p>CHAPTER 6 Credit Cards and Debit Cards 91</p>
<p>Credit Cards 94</p>
<p>Debit Cards 96</p>
<p>Credit Cards and Debit Cards: Considerations 99</p>
<p>CHAPTER 7 Employee Expense Reimbursement 103</p>
<p>Expense Submission 104</p>
<p>Where Are the Abuses? 106</p>
<p>Payment Processing 109</p>
<p>Employee Expense Reimbursement: Considerations 111</p>
<p>CHAPTER 8 Electronic Banking 115</p>
<p>Traditional Banking (In–Person Deposits and Manual Check Writing) 115</p>
<p>Check Processing and Clearing Changes 117</p>
<p>Changes in Bank Deposits 120</p>
<p>ATMs 121</p>
<p>Online Banking 122</p>
<p>What Can You Do? 123</p>
<p>Electronic Banking: Considerations 132</p>
<p>CHAPTER 9 Payroll Processing 137</p>
<p>Payroll Administration: Adding/Changing/Terminating 138</p>
<p>Payroll Processing 142</p>
<p>Payroll Tax Returns 149</p>
<p>Payroll Processing: Considerations 151</p>
<p>CHAPTER 10 Inventory Issues and Controls 153</p>
<p>Prevention: Good News and Bad News 153</p>
<p>Retail Businesses: Items Available for Sale 153</p>
<p>All Businesses: Items for Use by Employees (Supplies, Tools, and Equipment) 166</p>
<p>Detection 166</p>
<p>Inventory Issues and Controls: Considerations 169</p>
<p>CHAPTER 11 Bank Statements, Canceled Checks, and Reconciliations 173</p>
<p>Bank Statements 177</p>
<p>Investment Account Statements 178</p>
<p>Canceled Checks 178</p>
<p>Bank Reconciliations 181</p>
<p>Bank Statements, Canceled Checks, and Reconciliations: Considerations 187</p>
<p>CHAPTER 12 Financial Reports 189</p>
<p>Generate Financial Reports Regularly 190</p>
<p>Why Is the Regular Review of Financial Reports So Important? 195</p>
<p>When to Consider Outside Advice and Assistance 196</p>
<p>Financial Reports: Considerations 202</p>
<p>CHAPTER 13 Safeguarding Your Bookkeeping or Accounting Systems 205</p>
<p>Manual Bookkeeping Systems 206</p>
<p>Computerized Bookkeeping and Accounting Systems 209</p>
<p>QuickBooks Users 222</p>
<p>Safeguarding Your Bookkeeping or Accounting Systems: Considerations 224</p>
<p>CHAPTER 14 Prevention, Detection, and Insurance 227</p>
<p>Timing Is Everything 229</p>
<p>Adequacy of Coverage 230</p>
<p>Responsibilities for a Claim 230</p>
<p>Disclaimer 235</p>
<p>Prevention, Detection, and Insurance: Considerations 236</p>
<p>CHAPTER 15 Your Response to an Identified or Potential Issue 239</p>
<p>A Dreaded Day of Discovery 239</p>
<p>Due Diligence on the Discovery 243</p>
<p>What If It Appears to Be Fraud? 246</p>
<p>Your Response to an Identified or</p>
<p>Potential Issue: Considerations 249</p>
<p>Appendix A: Embezzlement Controls for Business Enterprises 253</p>
<p>Appendix B: Who Was Lester Amos Pratt? 291</p>
<p>About the Author 295</p>
<p>Index 297</p>