What can smaller organizations do when segregation of duties is difficult to accomplish?
For small companies that are lesser staffed, the owner should be visible and regularly involved in everyday business. The presence of an owner or managers who keep a watchful eye is sometimes enough to prevent many employees from even attempting fraud. Also, be sure to assign passwords to accounts, and do not share these with all administrators. Enlist an independent accountant to audit the books annually and check internal controls to look for ‘leaks’ in the system that could present opportunities for fraud. Employers should communicate to their staffs that systems are in place to prevent and detect fraud – let them know that the financial statements and records are periodically reviewed. Finally, have a mandatory vacation policy. A ‘fill-in’ worker may notice any glitches in the system. What can happen when fraudulent activity occurs over the long term? In the worst case scenario, fraud can run a company out of business. More often, fraud can disrupt operations and cash flows and can
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