NCJ Number
18270
Date Published
1973
Length
7 pages
Annotation
THIS PAMPHLET OFFERS SUGGESTIONS ON HOW AN ALERT BUSINESSMAN CAN THWART DISHONEST PRACTICES AND DISCUSSES WHAT HE CAN DO IF IT APPEARS THAT ONE OF HIS EMPLOYEES HAS COMMITTED THE CRIME OF EMBEZZLEMENT.
Abstract
AN OWNER-MANAGER CAN LOSE A GREAT DEAL OF MONEY BEFORE EVEN SUSPECTING THAT EMBEZZLEMENT MIGHT BE GOING ON. THAT IS BECAUSE THIS CRIME--BY DEFINITION--IS COMMITTED BY SOMEONE IN A POSITION OF TRUST. THE LOSS MAY INVOLVE A SMALL AMOUNT TAKEN BY AN EMPLOYEE FROM THE CASH REGISTER, OR IT MAY BE A CONSIDERABLE SUM STOLEN THROUGH AN ELABORATE SCHEME OF JUGGLING THE BOOKS. SIMPLE CONTROLS BUILT INTO THE ACCOUNTING SYSTEM CAN OFTEN FORESTALL ANY SUCH PRACTICES IN YOUR OPERATION. IN ANY CASE, THE PROPER INTERNAL CONTROLS MAY HELP DOCUMENT INCRIMINATING EVIDENCE, WITHOUT WHICH IT IS DIFFICULT TO ESTIMATE YOUR LOSS FOR INSURANCE PURPOSES OR EVEN TO PROVE IT RESULTED FROM A CRIME. THERE ARE THREE PRINCIPAL WAYS IN WHICH AN OWNER-MANAGER CAN MINIMIZE THE POSSIBILITY OF EMBEZZLEMENT LOSSES. NONE IS COMPLETELY EFFECTIVE WITHOUT THE OTHERS. INTERNAL CONTROLS ARE PERHAPS THE MOST EFFECTIVE SAFEGUARD AGAINST FRAUD, BUT EVEN THE BEST PRECAUTIONS CAN'T MAKE IT ABSOLUTELY IMPOSSIBLE. INDEPENDENT AUDITS DISCOURAGE FRAUD AND MAY UNCOVER IT. BUT THEY CAN'T, AS SOME PEOPLE MISTAKENLY BELIEVE, GUARANTEE DISCLOSURE OF ALL IRREGULARITIES. FIDELITY COVERAGE CAN HELP THE BUSINESSMAN RECOVER WHAT MAY BE LOST IN SPITE OF HIS BEST EFFORTS TO PREVENT EMBEZZLEMENT. (AUTHOR ABSTRACT)