The main focus of your company’s fraud prevention efforts should be focused on the creation and implementation of proactive preventive techniques, including internal controls, policies, and procedures that are specifically designed to prevent fraud.
Establish clear and easy to understand standards from the top down. Have an employee manual that clearly outlines these standards and rules.
Always check references and perform background checks that include employment, credit, licensing and criminal history for all new hires.
Secure physical assets, access to data, and money at all levels including monitoring and controlling access to cheque books (never sign blank cheques)
Segregation of duties of employees. Separate important accounting and account payable functions. Small-business owners and managers should review every payroll. Payroll is one of the most vulnerable areas for fraud.
Proper authorisation of transactions, ensuring that employees aren’t exceeding their authority.
Independent checks on performance, using audits, surprise check-ups, inventory counts, or other procedures to verify compliance with policies and procedures, as well as accuracy.
Do not have single source authorisations on internet banking and do not let anyone have your passwords or access codes.
Small-business owners should control who first receives the bank statements and other sensitive documents.
All account reconciliations and general ledger balances should have an independent review by a person outside the responsibility. This allows for reviews, better ensuring nothing is amiss and providing a deterrent for fraudulent activities.
Conduct annual audits to motivate all bookkeeping-related staff to keep things honest because they can never be sure what questions an auditor is going to ask.