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Are your business assets vulnerable to theft?

[1]The United States Trustee (“UST”) encourages every chapter 11 small business owner to think about whether assets essential to the business are protected against theft or fraud. The potential for employee dishonestly, the most common type of business theft, increases when one or more employees have too much control over cash or other vulnerable assets concurrently with control over accounting functions. By implementing basic internal controls and maintaining strong personal oversight of the accounting functions, the small business owner can minimize the opportunities for an employee theft to occur.

Consider these examples of internal controls:

SEGREGATION OF DUTIES
Related duties should be assigned to different people whenever possible.

BANK RECONCILIATIONS
Receive bank statements unopened and scrutinize for unusual activity.

RECEIPTS & OTHER ASSETS
Safeguard valuable assets.

DISBURSEMENTS
Review the appropriateness of payments.

BANKRUPTCY RELATED
Verify payment of post-petition taxes.

For more information on protecting your small business from fraud, contact a ShindelRock tax professional [2] today.