In these economic times internal controls are more important than ever.
Employee discontent and personal financial difficulties have been shown to be the major causes of employee theft and misconduct.
Steps should be taken to institute or improve your company’s internal controls:
1. Hiring Procedures
Careful screening of all potential new hires is important. Consult with a labor attorney on the best method to screen and hire the appropriate applicant.
2. Separation of Duties
Different employees should be responsible for each aspect of a function; ie. the same person who order/receives merchandise should not be responsible for paying bills. The same employee should not write checks, sign checks, and reconcile bank statements.
3. Payroll
Managers or supervisors should sign all employee time cards to confirm hours worked.
4. Building Security
Buildings should be well lit and should have a burglar alarm. Only authorized personnel should have keys/access to buildings.
Management must uniformly enforce standards of honesty and ethical conduct.
TO BE CONTINUED
