|
|
 |
|
There are many risks associated with cash handling. Theft or misappropriation of cash may be assisted by the suppression, falsification or destruction of accounting records, or where no initial records are created at all. This section suggests some controls which should be in place if your operation handles cash:
| Fraud type: |
Theft of cash |
| Suggested controls: |
Ensure that cash is held securely at all times |
|
Establish controls over keys and only issue them to authorised personnel |
|
Keep cash balances to a minimum; record and check them periodically |
| Fraud type: |
Money payments are illegally transferred or diverted by making duplicate payments, paying the wrong person, or by increasing the value of one payment at the expense of another. |
| Suggested controls: |
Be sure that changes and additions to payee details and any other standing data is independently authorised |
|
Restrict access to the systems that allow changes to be made and authorised |
|
Ensure that all payments are independently authorised before they are made |
|
Review payment reports for accuracy immediately before the transfer of funds occurs |
|
Maintain a separation of duties between those setting up payment accounts and those authorised to trigger payments at all times. Similarly separate duties of receiving goods and services from the process of making payment. |
| Fraud type: |
Cash received is not brought to account |
| Suggested controls: |
Use serially numbered receipts to control received cash. These receipts should be prompt, accurate and complete; where possible receipts should be generated automatically, dated and timed and numbered. |
|
Use clearly visible displays to show the customer the amounts being registered; Use restrictions on permissible pricing (e.g. bar codes) |
|
Ensure post is opened under controlled conditions; |
|
All funds received should be brought to account and banked. Reconcile the amounts received, accounted for and banked. Ensure that these reconciliations subject to a supervisory review |
| Fraud type: |
Accounting records are falsified or amended to allow unauthorised payments |
| Suggested controls: |
Ensure that amendments and deletions to accounting records are:
- independently authorised - evidenced by signature, together with name and position of the authority; and
- independently checked and countersigned to ensure that the amendment has been carried out correctly.
|
|
Authorisation levels and frequency of checks, including the use of spot checks, should depend on the amounts involved and the degree of risk associated with the system. |
|
Reconcile accounting records and petty cash on a regular basis. These reconciliations should be recorded and independently reviewed. Investigate and resolved any discrepancies. |
|
Any discrepancies which cannot be resolved, or any losses which have occurred, should be reported as part of a formally defined process. |
|
Review suspense accounts on a regular basis to confirm their validity. |
| Fraud type: |
Invoices are falsified or duplicated in order to generate a false payment. |
| Suggested controls: |
Segregate duties between ordering and payment of invoices |
|
Carry out periodic checks for duplicate invoices |
|
Check invoices back to orders for evidence that the orders were genuine and properly authorised. |
| Fraud type: |
Unauthorised use of cheques and payable orders |
| Suggested controls: |
Hold financial stationery securely and keep records of stock holdings, withdrawals and destruction of wasted stationery |
|
Cheques and payable orders should be checked to source documentation before issue |
|
Mark non-transferable payable instruments as "not negotiable" |
|
Establish signatories and delegated powers for cheques and payable orders; |
|
Use indelible tamper-proof printing and other techniques to make manipulation detectable and more difficult |
|
Ensure that addresses to which payable instruments are sent are correct. For large value payments check encashment to ensure that the intended recipient did receive the payment. |
| Fraud type: |
Theft of proceeds on sale of assets or services |
| Suggested controls: |
Set, and perodically review, the prices for assets or services to ensure the best price is obtained |
|
Establish supervisory controls to ensure that sale proceeds are recovered promptly and accurately and completely brought to account |
|
Establish and apply authority levels for write-offs |
|
Establish and adhere to formal procedures for debt recovery |
|
|
