Prevention or Detection of Cash Misappropriation
Cash misuse system is a common type of asset misappropriation that involves the theft of money. Tampering with cheque, and money orders lead to fraud and skimming for personal gain fooling the organization. Freedmen’s within an organization leads to unexpected losses and therefore developing a plan to prevent and identify fraud is easier rather than recovering the money after its misappropriation. According to Gallena (2016), the internal controls are measure an organization puts in place to prevent and detect cash misappropriation within an organization. The internal control should be updated and reviewed to make it hard for a person to access and misuse of money. To reduce fraud in an organization
The measures include keeping the cash, cheque and money order secure in a safe place to enhance better defences against the access of cash for misuse (Koomson et al., 2020). Cheque transactions are common in many organizations, thee to prevent cheque tampering unused and cancelled cheque are appropriately destroyed. Also, keeping good records of bank transaction and cash receipts makes it possible to account for the cash used within the organization to prevent defrauding an organization. Another measure is documenting cash transfers such as giving receipt after every cash exchange to show that the transactions are legal (Koomson et al., 2020). . organization also prevents cash misappropriation by creating secure usernames and passwords in financial accounts to avoid unauthorized cash transaction.
Internal measures for detection involve checking the balances using the systems to make sure there is an adequate financial transaction. Another action is regularly reconciling bank accounts to verify the finances of the organization (Chorvatovičová & Saxunová, 2016). Additionally, preparing good policies and procedures for purchase guidelines and cash disbursement makes sure only relevant people can access the organization finances. In addition to this, organization should work with banks to verify a cheque using serial numbers against the bank database to prevent suspicious transactions.
References
Chorvatovičová, L., & Saxunová, D. (2016). The usefulness of financial statements and annual reports in the process of accounting fraud detection. In Managing Global Changes: Proceedings of the joint international conference (pp. 233-247).
Gallena, J. T. (2016, January). Internal Control, Ethics And Hiring Process Towards Employee Theft Prevention For Cash. In Journal of International Scholars Conference-BUSINESS & GOVERNANCE (Vol. 1, No. 3).
Koomson, T. A. A., Owusu, G. M. Y., Bekoe, R. A., & Oquaye, M. (2020). Determinants of asset misappropriation at the workplace: the moderating role of the perceived strength of internal controls. Journal of Financial Crime.