13 Red Flags to Bookkeeping Fraud  

1. Has your bookkeeper asked for signature authority on your checks?  

2. Does your bookkeeper's lifestyle seem inconsistent with their earnings? 

3. Does your bookkeeper frequently take records home to work on or work in the office when no one is around? 

4. Does your bookkeeper refuse to go on vacation? 

5. Does your bookkeeper get defensive when you or your CPA ask questions? 

6. Does your bookkeeper have access to your credit card information and receive mail-order packages at work? 

7. Are your accounting records in a mess? 

8. Do you receive frequent tax delinquency notices that the bookkeeper explains away as government error? 

9. Does your bookkeeper insist that he or she handle activities for which other departments are normally responsible: including picking up or opening the daily mail, making bank deposits, or acting as the sole go-between with the company's financial contacts.

10. Does your bookkeeper continually misfile important items such as payroll receipts, deposit records, supplier correspondence and estimates?

11. Deposits frequently seem too small. 

12. Does your bookkeeper show signs of a drinking, drug, or gambling problem or family financial problems?

13. Has your bookkeeper suggested replacing or getting rid of the outside accounting firm, saying he/she can handle the duties of the independent accountant and "save the company the added expense”?

If you answered 'yes' to any of these questions don't panic. Chances are there is a perfectly reasonable and acceptable explanation. But, don't ignore the symptom either. Talk with your accounting professional and carefully evaluate the situation. Better yet, come up with a plan before it happens.

Coach's Corner by Laurie Owen		Are emotions ruling your house?
		Think about how you react to frustrating events in your life. A careless driver cuts you off. Your employee makes another mistake. A customer asks for a “better deal” when your margins are already slim. continued
Tip of the Month For those of you with calendar year-ends, September is a good time to talk to your accounting staff and CPA about a plan for getting your year-end financials done in a timely manner. Set a goal, for example, year-end financials will be finalized by Feb 28, 2005. What information will be needed before then to make this possible? What information does your CPA need and when? What can be done now before the Christmas season hits? Put together an action item list, with target dates and person responsible. Set up a meeting date for the first week of January to re-visit this issue with your bookkeeper and CPA. Once you have your statements finalized, don’t forget to send a copy to your banker.

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