Preventing and Detecting Employee Theft and

Small business owners and accounting departments need immediately useful tips for preventing embezzlement from taking hold in their organizations. With practical guidance for detecting embezzlement in every business, this book reveals lessons learned by author Stephen Pedneault in his twenty years of working with small businesses and organizations both in preventing and investigating employee embezzlements. This eye-opening book offers business professionals an insider look at the different ways embezzlement occurs in businesses, and hard-won advice for keeping their businesses from becoming victims of embezzlement and fraud.

Stephen Pedneault, CPA/CFF, CFE is the founder and Principal of Forensic Accounting Services, LLC, a CPA firm specializing in forensic accounting, employee fraud, and litigation support matters, Steve is the author of Fraud 101: Techniques and Strategies for Understanding Fraud and Anatomy of a Fraud Casebook: Lessons from the Bad Side of Business. all published by Wiley. Steve has also written numerous articles appearing in local and national media, and is a frequent in local and national media, and is a frequent speaker on the subjects of employee embezzlement and forensic accounting. For more information about Stephen Pedneault, to www.forensicaccountingservices.com.

Preface	p. xiii
Acknowledgments	p. xvii
Introduction	p. xix
Hiring the Right Employees	p. 1
Disclaimer	p. 1
Where Do You Start?	p. 1
Advice of Counsel	p. 3
Application Policy	p. 3
Due Diligence	p. 5
Personal Information	p. 7
Past Employment	p. 8
Education	p. 9
References	p. 11
Criminal and Civil History Checks	p. 11
Credit Checks	p. 13
Hiring Time	p. l4
Hiring the Right Employees: Considerations	p. 17
Know Your Employees	p. 19
Why Is Knowing Your Employees Important?	p. 24
Open Communications	p. 25
What Should You Watch for in Your Employees?	p. 26
Know Your Employees: Considerations	p. 29
Sales, Cash Receipts, and Collections	p. 31
Here's Where Everything Starts	p. 31
Recording and Tracking Sales	p. 32
Collections	p. 44
Debit Memos and Other Adjustments	p. 48
Accounts Receivable	p. 52
Sales, Cash Receipts, and Collections: Considerations	p. 54
Credit Card Sales, Transactions, and Merchant Statements	p. 59
Processing Sales	p. 59
Reconciling Sales	p. 61
Processing Refunds or Credits	p. 61
Reviewing and Reconciling Refunds or Credits	p. 63
Reviewing and Reconciling the Merchant Statement	p. 67
Credit Card Sales, Transactions, and Merchant Statements: Considerations	p. 69
Purchases, Cash Disbursements, Checks, and Petty Cash	p. 71
Purchases	p. 75
Cash Disbursements/Checks	p. 80
Unpaid Bills/Accounts Payable	p. 84
Petty Cash	p. 86
Purchases, Cash Disbursements, Checks, and Petty Cash: Considerations	p. 88
Credit Cards and Debit Cards	p. 91
Credit Cards	p. 94
Debit Cards	p. 96
Credit Cards and Debit Cards: Considerations	p. 99
Employee Expense Reimbursement	p. 103
Expense Submission	p. 104
Where Are the Abuses?	p. 106
Payment Processing	p. 109
Employee Expense Reimbursement: Considerations	p. 111
Electronic Banking	p. 115
Traditional Banking (In-Person Deposits and Manual Check Writing)	p. 115
Check Processing and Clearing Changes	p. 117
Changes in Bank Deposits	p. 120
ATMs	p. 121
Online Banking	p. 122
What Can You Do?	p. 123
Electronic Banking: Considerations	p. 132
Payroll Processing	p. 137
Payroll Administration: Adding/Changing/Terminating	p. 138
Payroll Processing	p. 142
Payroll Tax Returns	p. 149
Payroll Processing: Considerations	p. 151
Inventory Issues and Controls	p. 153
Prevention: Good News and Bad News	p. 153
Retail Businesses: Items Available for Sale	p. 153
All Businesses: Items for Use by Employees (Supplies, Tools, and Equipment)	p. 166
Detection	p. 166
Inventory Issues and Controls: Considerations	p. 169
Bank Statements, Canceled Checks, and Reconciliations	p. 173
Bank Statements	p. 177
Investment Account Statements	p. 178
Canceled Checks	p. 178
Bank Reconciliations	p. 181
Bank Statements, Canceled Checks, and Reconciliations: Considerations	p. 187
Financial Reports	p. 189
Generate Financial Reports Regularly	p. 190
Why Is the Regular Review of Financial Reports So Important?	p. 195
When to Consider Outside Advice and Assistance	p. 196
Financial Reports: Considerations	p. 202
Safeguarding Your Bookkeeping or Accounting Systems	p. 205
Manual Bookkeeping Systems	p. 206
Computerized Bookkeeping and Accounting Systems	p. 209
QuickBooks Users	p. 222
Safeguarding Your Bookkeeping or Accounting Systems: Considerations	p. 224
Prevention, Detection, and Insurance	p. 227
Timing Is Everything	p. 229
Adequacy of Coverage	p. 230
Responsibilities for a Claim	p. 230
Disclaimer	p. 235
Prevention, Detection, and Insurance: Considerations	p. 236
Your Response to an Identified or Potential Issue	p. 239
A Dreaded Day of Discovery	p. 239
Due Diligence on the Discovery	p. 243
What If It Appears to Be Fraud?	p. 246
Your Response to an Identified or Potential Issue: Considerations	p. 249
Embezzlement Controls for Business Enterprises	p. 253
Who Was Lester Amos Pratt?	p. 291
About the Author	p. 295
Index	p. 297
Table of Contents provided by Ingram. All Rights Reserved.

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Preventing and Detecting Employee Theft and Embezzlement A Practical Guide

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