Bank Reconciliation Process

Dealing With Insiders' Threats (Part 5)

By Joseph R. Dervaes, CFE, ACFE Fellow, CIA

Fraud's Finer Points 

In previous columns, I've discussed critical steps the owner of a business - or other designated independent party - should take while performing bank reconciliations to minimize the risk of fraud from both insiders and outsiders. These steps include looking for check fraud and identifying unauthorized disbursement and payroll checks issued to trusted employees and false vendors. These reviews can ensure all redeemed checks have been issued for legitimate business purposes. We continue our discussion on insider threats begun in the November/December 2008 column.

What should a reviewer actually look for when performing bank reconciliations?" ask those who are responsible for this task in their jobs. Sometimes even these well-meaning employees don't really understand what they're doing or why.

Often the predecessor of one of these employees has taught him or her what to do and when to do it, and the employee has been doing it that way ever since without questioning the process.


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