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The Role of Internal Controls in Fraud Prevention

 
  Arthur F. Rothberg, Managing Director, CFO Edge, LLC  
   
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  Article Summary  
In our last article, we talked about how in a sluggish economy like the one we’re now facing, companies may be at an increased risk for internal fraud and embezzlement. When times are tough, it’s easier for some employees to consider perpetrating acts of fraud against their employer that they might not even think about if not facing severe personal financial challenges and stress.

Some CEOs and CFOs think that their employees would never steal from them. In reality, though, embezzlers often turn out to be long-time, trusted employees whom CEOs would never suspect of stealing.

This article elaborates on fraud prevention with reviews of five of the most common types of employee fraud and six internal controls that can be implemented to reduce exposure to fraud risk.

It’s critical that Los Angeles and Southern California CEOs and CFOs implement sound internal controls to help guard against employee fraud and embezzlement. The cost of fraud can be devastating to small and mid-sized businesses, which often don’t have the financial resources to recover from a major fraud loss. An outsourced CFO services provider can offer valuable assistance by helping spot potential problem areas and implementing sound internal control measures.

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