CAMICO-CPA Professional and Employment Practices Liability Insurance
Member Login
Products Risk Management Services Get A Quote About CAMICO
 

Top 16 Tips for Avoiding Fraud
CAMICO Risk Management Report for CPAs

The most common method of fraud detection is a tip or complaint from an employee, vendor, customer or anonymous informant. Although small business frauds have a relatively low detection rate of fraud by audits, it does not accurately reflect the effectiveness of audits as deterrents to fraud by putting personnel on notice that a theft is likely to be detected.

The following list of practical loss prevention tips designed to prevent fraud from occurring has been compiled from a variety of sources.

Internal Controls

1. Separate the duties of receiving funds, disbursing funds, writing checks, signing checks, and reconciling bank accounts. Having one employee responsible for all cash-related functions makes small businesses vulnerable to fraud.

2. Have the monthly bank statement delivered unopened to the owner, who should review it for unusual transactions such as declining deposits and unfamiliar payees.

3. Owners should look for signatures or endorsements that look forged, missing checks, check numbers that are out of order, and checks where the payee listed does not match the name in the check register.

4. Consider an independent review of the cash accounts and bank statements by an anti-fraud specialist.

Employment Conditions

5. Institute background checks on new employees, and notify job applicants that their backgrounds will be checked.

6. Employees who receive regular and recurring training about the detrimental aspects of fraud are more likely to aid in controlling it.

7. Employees who feel well-treated and adequately compensated are less likely to commit occupational fraud than those who don't.

8. Employees who hold grudges against their employers-whether or not justified-are more likely turn to occupational fraud and abuse.

Workplace Conditions

9. Insist that employees take a vacation for at least one week every year and use that time to have the books reviewed for discrepancies.

10. Adopt a tip hotline or complaint-reporting mechanism that will enable employees, vendors, customers, or outside sources to report suspected fraud anonymously or without fear of reprisal.

11. Employers can gain valuable information by simply asking questions in a non-threatening, non-accusatory manner.

12. Conduct internal and external audits, especially a "fraud audit" instead of a "general audit" if you suspect fraud.

Automation

13. Have an accounting software program expert, preferably a CPA, do the initial set-up of the program to make sure that helpful features are turned on and unhelpful features are turned off.

14. Access to personnel and vendor master file records should be password protected and restricted by job function.

15. Computer systems should create an audit trail of all changes made to the vendor master file records, including an identification of those who made the changes.

16. Changes to vendor master file records should require supporting documentation, supervisory approval, and independent review. 
 
-------------------------------------------------------------------------------------------------------------------------------------------------- 
 
CAMICO is the nation's largest CPA-focused provider of professional and employment practices liability insurance and risk management services for the accounting profession. Endorsed by state CPA societies and associations, CAMICO serves more than 7,600 accounting firms in 45 states and the District of Columbia.

In addition to comprehensive policy coverage, CAMICO focuses on helping firms reduce their malpractice risk exposure by providing access to practice and risk management knowledge and tools. This article provides an example of the type of risk management advice CAMICO makes available to policyholders.
 
---------------------------------------------------------------------------------------------------------------------------------------------------

FREE REPORT - What free report

Even when covered by insurance, claims can have a significant impact on your practice in terms of time, money, professional reputation, and peace of mind. This free report will help you recognize the 'Five Warning Signs of a Claim.'

Send an e-mail to riskadvisors@camico.com to request the CAMICO Report - Five Warning Signs of a Claim. 

 


---------------------------------------------------------------------------------------------------------------------------------------------------

ABOUT CAMICO

CAMICO Mutual Insurance Company was founded by CPAs in the 1980s, introducing a new way of approaching accountants’ professional liability insurance that focuses on helping firms reduce their risk exposure. In addition to comprehensive policy coverage, policyholders have access to a wide range of practice and risk management knowledge and tools, created by CPAs for CPAs.

Twenty four years later, CAMICO continues to be the leader in innovation in practice and risk management issues facing CPAs and in providing CPAs nationwide with new insurance options. Through its wholly owned subsidiary CAMICO Insurance Services (CIS), CAMICO offers an ‘A’ rated CPA insurance program that is administered by CIS.

FREE REPORT

FIVE WARNING
identify free report
 

Even when covered by insurance, claims can have a significant impact on your practice in terms of time, money, professional reputation, and peace of mind. This free report will help you recognize the 'Five Warning Signs of a Claim.'

Send an e-mail to riskadvisors@camico.com to request the CAMICO Report - Five Warning Signs of a Claim. 

 

 


      News Contact Us Testimonials Employment Report A Claim For Our Agents
 

       Copyright 2014 CAMICO Mutual Insurance Company. All rights reserved.  
       Coverage for the CAMICO program is provided by (i) CAMICO Mutual Insurance Company;
       (ii) Liberty Insurance Underwriters Inc., administered by CAMICO Insurance Services. 
      1800 Gateway Drive, Suite 300, San Mateo, CA 94404. Toll free 1.800.652.1772
  
Privacy | Terms & Conditions
                  

FOLLOW CAMICO