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Policies & Procedures to Prevent Fraud and Embezzlement

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Policies & Procedures to Prevent Fraud and Embezzlement

Guidance, Internal Controls, and Investigation

Wiley,

15 min read
10 take-aways
Audio & text

What's inside?

Embezzlers often have familiar faces. They can be co-workers. They know your system. So how do you prevent them from attacking?

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Editorial Rating

8

Qualities

  • Innovative
  • Applicable

Recommendation

This basic, informative book exactly addresses its title topic. Edward McMillan delivers straightforward advice for companies of all sizes. He also offers individuals advice on avoiding identity theft. McMillan covers everything from case histories to the details of hiring agreements, and how to fire an employee who commits fraud. Each chapter contains recommendations, sample documents, key points and checklists. The book also provides 119 pages of useful sample documents relating to internal controls to help you prevent this widespread, costly crime. getAbstract recommends McMillan’s practical guide to anyone concerned about corporate – and personal – security.

Summary

The Ugly Reality

Fraud can happen in any business. And when it does, the criminal usually is someone you’d never suspect. Embezzlers can be any age, rank or race, and either gender. They carry out their crimes for any number of reasons, although their fellow workers generally don’t know their motives, which can include drug abuse, gambling, dire financial need or mere thrills. The typical embezzler is “compulsive, was denied a promotion, has an expensive lifestyle or never takes a vacation.” Fraudulent behavior is often tied to need, opportunity and a contrived rationale for undertaking the theft.

Take the CEO who approved his own credit-card statements. When outside auditors discovered that he regularly charged a few thousand dollars a month at a particular eatery, they requested help from the restaurant’s management. A few weeks later, the restaurant’s executives reported their findings: whenever the CEO ate there, the same assistant manager, his girlfriend, served him. The CEO would leave thousand-dollar tips, which the woman redirected to her bank account. The corporation discovered the fraud when an outside accountant expressed his discomfort with its credit-...

About the Author

Edward J. McMillan, CPA, CAE, is an experienced fraud examiner. He teaches fraud-prevention courses to professional organizations and regularly speaks on this topic.

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