| Embezzlement is an act of unlawful | | | | funds are supposed to be available for withdrawal |
| misappropriation of property by a person to | | | | or use, this will ensure that full amount of funds is |
| whom it has been entrusted or is in his care | | | | available and no fraction of it is embezzled by the |
| custody. In many cases embezzlement by | | | | person to whom it has been entrusted. |
| employee does not become public and the | | | | Conduct periodic surprise internal audits. These are |
| employee is fired without any reason and charges | | | | most effective after identifying high risk areas. |
| are not filed. Embezzlement is like a parasite which | | | | Surprise internal audit can acts as a deterrent to |
| eats your business. Internal control measures not | | | | embezzlement. |
| only make embezzlement difficult but they could | | | | Other step which may be taken to prevent |
| also make management aware to embezzlement | | | | embezzlement is to follow careful recruitment |
| when it occurs. | | | | procedures, while hiring employees for position of |
| Few internal control measures against | | | | trust. The typical background check involves |
| embezzlement are as follows: | | | | employment and education verification, reference |
| Whenever possible, segregate duties and | | | | checks, criminal conviction checks, drug screening |
| responsibilities. If one person has access to, or | | | | and a credit check. |
| processes an entire transaction, the risk of fraud | | | | Explain ethics of organization to each and every |
| is high. If possible rotate duties. | | | | employee from top to bottom. Explain them that |
| Another method that deter embezzlement is to | | | | there minutes activities are monitored. Employees |
| regularly and unexpectedly move funds from one | | | | who believe that they are being monitored are |
| advisor or entrusted person to another when the | | | | less likely to steal. |