Preventing Fraud in Nonprofit Organizations - 
How It Happens and How You Can Prevent It
Description
Table of Contents
 
About the Author
 

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Ed McMillan, is a member of the Society of Certified Fraud Examiners and has uncovered hundreds of embezzlements. This practical guide to fraud avoidance is a must-have book for the organization that is serious about protecting its assets against employee dishonesty.

Written in easy-to-understand language, this valuable resource not only includes guidance on implementing effective internal control policies to avoid fraud, it also explains, through fascinating stories based on actual scams Ed has uncovered, profiles of embezzlers, warning signs to look for,
valuable check lists and tips, and what could happen if the controls included in the book are not implemented.

THE POINT IS SIMPLE - 
You only think your employees are honest
Table of Contents

About the Author ix

Acknowledgments xi

Preface xiii

Disclaimer xv

About the Companion Website xvii

Section 1
Not-For-Profit Organizations: Four Consistent Areas of High Risk
Embezzlement: Who Does It and When 1

Not-For-Profit Specific Issues 1

Summary 4

The Perpetrators: Who They Are, Why They Do It, and How They Are Caught 4

The Embezzler's "Window of Opportunity" 9

Section 2

Statement of Auditing Standard No. 99
"Consideration of Fraud in a Financial Statement Audit" 13

Statement of Auditing Standard No. 99
"Consideration of Fraud in a Financial Statement Audit" 13
Section 3

Essential Internal Control
and Administrative Procedures to Avoid Embezzlement 23

The Background Check 23

Conditions of Employment Agreement 28

Conflicts of Interest 34

Nepotism 37

Whistleblowers 39

Noncompete Agreements 41

Confidentiality of Information 43

Bonding Issues 45

Signers on Bank Accounts 46

Two-Signature Checks 46

Lockbox 48

Positive Pay 49

Deposit Security and Restrictive Endorsements 50

CheckStock 52

Cash Transactions 53

Cash Register Issues 54

Insurance Committees 54

Computer File Backups 55

Check and Wire Transfer Signatures 56
Inventory Issues 58

Company Credit Cards 58

Lines of Credit 59

Bad Debt Policy 61

Internal Audits 63

Stop Payment Orders 64Voiding Checks 66

Numbered Check Request Forms 68

Expense Accounts 70

CPA Management Letters 71

Random Disbursement Checks 73

CHECK 21 74
Section 4
Clever Examples of Embezzlement 77

Payroll Tax Deposits 77

Check Switching 82

Ghosts on the Payroll and Ghost Vendors 88

The Danger of Acronyms 94

Bank Account Reconciliations 95

Wire Transfers 96

Postage Issues 98

Kiting 100

Manual Checks (Handwritten and Typed) 101

Auditing Receipts 104
Section 5
Steps to Take If You Have Been Victimized by Fraud 105

Documenting a Fraud Action Plan 105

Fraud Examinations and Assembling the Fraud Team 109

The Basics of Forensic Accounting 113
Section 6
Internal Control Analysis, Documentation, and Recommendations for
Improvement 121

Internal Control Analysis, Documentation, and Recommendations for Improvement 121

Fraud Glossary 197

Index 217

Call and speak to us personally!!
EDWARD J. McMillan, CAE
POST OFFICE BOX 771
Forest Hill, MD. 21050
Telephone and Fax: 410-893-2308
email: emcmillan@sprintmail.com

Copyright © 2006 Edward J. McMillan, CAE. All Rights Reserved.
http://www.nonprofitguru.com
http://www.nonprofitaccountingtax.com

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