Recent news reports revealed that in 2010, about $1 billion was spent to fight Medicare fraud. New malware has emerged that focuses on financial fraud. The former CEO of Brocade Communications has agreed to pay $845,000 to settle a fraud case with the SEC.

Everywhere we turn, fraud seems to be a major topic.

Just this week in the bank I felt — for a few moments — like a criminal when I presented an insurance check for deposit; because it had a surname on it that I haven’t used for many years I was escorted into a back office while a manager and a teller vetted it thoroughly and sternly. It was a bit embarrassing and stressful, but ultimately I was glad that they were so careful.

In business as well, controls have to be reviewed and heightened on a regular basis. CPE Link instructor Bonnie Nagayama says we should ask ourselves if our clients are doing everything they can to avoid fraud. She presents courses that outline internal controls and best practices for using QuickBooks to avoid the most common fraud schemes.

Internal controls, Nagayama says, include a “layered process that combines both accounting controls with administrative controls.” And despite the heightened awareness she advocates, the premise is that employees are basically honest.

She poses questions that every company should be asking, including how records are kept, what the process is to select and train personnel, whether duties are segregated, and where potential weaknesses are in the system.

Nagayama also offers a sample internal control letter and urges businesses to “know your employees and examine behavior changes,” and provides other tips that involve passwords, audit trails, updating the closing date monthly, and various backups.

Nagayama is a QuickBooks pro whose controller background and CPA experience provide a perfect blend to help bridge the gap between what a client wants and what the accountant needs. She has been a member of the QuickBooks Professional Advisor Program since its inception and is a member of the Intuit Speaker’s Bureau.

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