EMBEZZLEMENT PROTECTION CHECKLIST
1. Cash Collections and Receipts
Is the person who handles your cash also responsible for recording the cash?
Does the person who pays or orders inventory also receive the materials?
Are two or fewer people responsible for the accounting function?
Is only one person responsible for reviewing financial statements each month?
Is your review of financial journals sporadic?
Have you separated the accounting, incoming mail, and bank account functions?
Is there a minimum of two employees being in charge of opening the mail?
Have the management employees set a good example about asset control, ethics,
and not using company assets for personal purposes?
Have employees been educated about how theft occurs and the costs it can impose
on everyone in the company?
Have there been established a proper whistle-blowing structure to allow employees
to report theft by their co-workers that will ensure confidentiality?
Is a change fund being maintained?
Are receipts issued for cash payments?
Are receipts prenumbered?
Are carbon copies of receipts kept?
Are payments received indicated as check or cash on the receipts and
daysheets/computer?
Are damaged receipts voided and left in the book attached to the daysheet?
Are employees who handle cash bonded?
2. Deposits
Is deposit prepared daily?
Are deposits held overnight stored safely?
Are the carbon copy deposit slips attached to the daysheet/computer run?
Is the bank statement opened only at the doctor’s home?
Is the bank statement mailed to the doctor’s home?
Does amount deposited to the business account from receipts balance with the
month-end totals?
3. Daysheets and Financial Cards
If on a manual/pegboard system, is it used correctly?
Is there an individual daysheet/computer run for each day?
Does the doctor review and initial the daysheets/computer run?
Are daysheets/daily computer runs compared with appointment book and
financial records monthly?
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Yes No
Are all accounts with balances billed, even those pending insurance?
If manual:
Are daysheets and financial cards prepared in ink?
Is a tape of accounts receivable cards run at the end of each month and balanced
with A/R on daysheets?
Are financial cards stored safely?
Are all financial cards returned to card files nightly?
If computerized:
Where possible, are billing and collection duties done by separate persons?
Is backup on the computer performed daily?
Are discs stored off site in a safe place?
4. Petty Cash
Are cash expenditures itemized?
Are receipts kept for petty cash expenditures?
Do you keep a running balance of petty cash?
Does the cash balance agree with the records? Is it balanced monthly?
5. Bank Reconciliations
.
Do you review canceled checks and endorsements on a monthly basis?
Do you compare payroll checks with your current employee records?
Do you question funds transferred between bank accounts?
Do you track the number of credit card bills you sign per month.
Are bank reconciliations performed on a timely basis?
Is someone responsible for reviewing the reconciliations each month and
verifying the reconciled items?
Does the owner receive and open the bank statement prior to turning it over to
the person who performs the bank reconciliation?
6. Employees
Are employees required to rotate duties and responsibilities?
Are refund checks approved by the doctor?
Does the doctor review write-offs and adjustments monthly?
Are accounts in internal collection contacted at least monthly?
Are any of your employees extremely possessive of their work records and
reluctant to share their tasks?
Are any of your employees apprehensive about vacations and time off, while
always being the first in the office and the last out?
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Watkinson Laird Rubenstein Baldwin & Burgess, P.C.
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Yes No
Have you noticed substantial change of lifestyle in any of your employees?
Do you permit your account personnel to work longer than a year without
taking a vacation?
Do you have any accounting staff or key personnel who have not been secured
with a fidelity bond?
7. Safeguarding Assets
.
Are blank check stocks and signature stamps safely secured?
Do you restrictively endorse all checks when received?
Do you deposit cash and checks daily?
Do you maintain a list of office furniture, equipment, and company vehicles?
Do you have adequate insurance coverage for assets?
Are all systems backed up on a daily basis and is backup stored off-site?
Are passwords changed at least every six months?
Are employees’ personal belongings kept away from the front-office area?
8. Accounts Payable and Miscellaneous
Does the doctor sign all checks?
Does the doctor refrain from keeping a signature stamp in the office?
Does the doctor refrain from “skimming” or “dipping” into the petty cash?
Does an accountant or other outside person perform periodic review?
By: Date:
Feel free to contact Donald R. Laird at Watkinson Laird Rubenstein Baldwin & Burgess, P.C.,
at (541) 484-2277 in Eugene, (541) 673-5528 in Roseburg, or (541) 757-1365 in Corvalllis for further
information.
