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The prevention of fraud in the future depends on the development of adequate controls and procedures. As in this case, collusion makes it difficult to detect and prevent fraud. Regular reviews from the company’s auditors lower the risk of collusion. Lists of controls that reduce fraudulent activities include:
? Background checks should be performed on all new vendors
? Verify receipt of items/services before paying vendor invoices
? Segregate the duties of approving vendors and vendor payments
? A review of cancelled checks and bank statements by a third person
? Periodic review of the approved vendor list for any red flags
Based on the information gathered, other suspicious vendors exist...
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