Dishonest Bookkeeper—A Disaster Waiting to Happen

Just “Google” “dishonest bookkeeper”, and don’t be surprised to find around 147,000 results. Why so many hits? Well, every day a “trusted” bookkeeper can be found ripping-off thousands— if not millions—of dollars from their employer. Three examples:

• Vermont, 2010: Part-time dishonest bookkeeper sentenced to 18 months in prison for embezzling $180,000 from two businesses.
• Delaware, August 2009: The Assistant U.S. Attorney described this dishonest bookkeeper as a serial embezzler as she was sentenced to eight years for stealing $367,000 while on parole for a prior embezzlement.
• Massachusetts, August 2009: Bookkeeper indicted for stealing $500,000 over five years.  Despite a prior $100,000 embezzlement conviction, this dishonest bookkeeper was hired to take care of the books for her latest victim.

Once inside, a dishonest bookkeeper can literally destroy most companies. Unfortunately, few managers ever give thought that such schemes could happen within their operation.

Reduce your risk by:
1) Recognizing the Threat: Internal fraud is wide-spread and the dishonest bookkeeper has generally worked his/her way into a position of trust, has greatest opportunity, is least suspected, and has little supervision.

2) Recruiting Process: The best place to stop the dishonest bookkeeper is at the point of hire. Reduce your risk by conducting comprehensive background and credit checks.

3) Multiple Tasking: Ensure that the bookkeeper’s responsibilities do not include the ability to affect every stage of a critical financial process. For example, the employee who handles accounts payable should not open mail or be responsible for accounts receivable, just as a non-biased manager should perform bank reconciliations and monitor credit card charges.

4) Supervisory Oversight: Proper oversight helps to ensure that adequate controls are in place. This strategy also sends a message to a potentially dishonest bookkeeper that the boss is aware and alert.

These “four steps” will help to defeat the dishonest bookkeeper.

Develop strategies to help identify a dishonest bookkeeper by picking up Business Fraud: From Trust to Betrayal today!