Managing the Business Risk of Fraud

As fraud examiners, we often suggest that organizations develop formal written procedures for preventing and detecting fraud and communicating ethics policies. "Managing the Business Risks of Fraud," a joint publication of three associations, provides the blueprint for indispensable anti-fraud planning.  

Susan works as bookkeeper for a small organization. She and the assistant bookkeeper, Meredith, totally control the accounting function except authorization of transactions. Susan supplies information directly to the outside auditors, prepares QuickBooks®, and receives the unopened bank statements. The boss doesn't understand computers, and everyone knows it. This is a ticking time bomb.

Susan begins slowly. She writes herself a couple of checks and forges the boss' name. Then she gets greedy. After all, her paycheck is small, her boyfriend just moved out, and she has double the living expenses. Susan discovers it's easy to steal from her company; she just pretends in QuickBooks that the checks she writes to herself are sent to vendors. No one detects her improprieties.