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HR Magazine, October 2003 - Cover Story

By Robert J.Grossman  10/1/2003
 

HR Magazine, October 2003Vol. 48, No. 10

The Five-Finger Bonus

How to Protect Your Business

 

  • Set the tone at the top. Set an example of honesty in business dealings. Do not give employees an excuse or rationalization for their dishonesty.

  • Investigate every employee with a background check. Ask each applicant whether he or she has ever been convicted of a felony involving fraud, theft, forgery, embezzlement or larceny within the past 10 years. During reference checks, ask prior employers if the person is eligible for rehire.

  • Periodically review the work of every employee. The most trusted employees can do the most harm.

  • C reate a system of checks and balances. Have at least two people examine the bank statement and returned checks each month. Dont let the employees performing accounts payable and account balancing receive the bank statements. Embezzlers cover their tracks by removing and destroying original checks returned by the bank.

  • Make employees take at least one annual vacation for at least one week in duration. During the vacation, have another employee perform the work of the absent employee.

  • Treat unusual transactions with suspicion; look behind explanations that do not make sense.

  • Never sign a check unless the payee is typed or written in the payee line and the amount filled in. Never sign blank checks.

  • Consider purchasing employee honesty or fidelity insurance. These policies are relatively inexpensive and can provide company-saving protection.

  • Consider investing in an annual audit. Many embezzlers are discovered by audit professionals.

  • Report incidents of embezzlement to the FBI, your local district attorney or the police. Source: Denver District Attorneys Office
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