Policies and Procedures to Prevent Fraud and Embezzlement:
Guidance, Internal Controls, and Investigation
By Edward J. McMillan
308 pages; softcover
John Wiley & Sons Inc., Hoboken, N.J., 2006
Nearly every enterprise is a potential victim of fraud, and CPAs well-versed in the scope of fraudulent activities can help businesses prepare for the worst scenarios. Management and auditors will find this manual helpful in evaluating internal control systems to expose weaknesses, take corrective action and avert fraud.
Author Edward J. McMillan, a fraud examiner and CPA, advises a victimized company first to contact an independent CPA firm to assist with the investigation, insurance claims and going to trial, if necessary. Before a company implements the policies and procedures he discusses, an attorney should review them for compliance with federal, state and local laws.
In a workbook format, this publication lists the methods a company should employ to avoid embezzlement and offers sample forms for confidentiality agreements, conflicts of interest and check and wire transfer signatures, among others. Auditors complying with the requirements of Statement on Auditing Standards no. 99, Consideration of Fraud in a Financial Statement Audit, should find helpful the nearly 130 pages of illustrative policies and procedures in the section titled “Internal Control Analysis, Documentation and Recommendations”; the material also is available on a companion Web site. Additional sections provide case studies of actual embezzlements, profiles of the perpetrators and detailed data on identity theft issues. The fraud glossary is reprinted from the Association of Certified Fraud Examiners.
—Barbara J. Shildneck