In the event of a Canada Post strike we will do our best to ensure alternative delivery methods are used for client communications.  We can accept communications via email at contact@rossmcbride.com or fax 905.526.0732.  For account payments e-transfers and credit card payments can be made.  Please call us for further instructions 905.526.9800.

March is fraud prevention month. Don't be a victim

Many partnerships and small corporations are often victims of fraud when there are not enough checks in their accounting systems.
 
For example, I have seen many cases in which one partner claims against another for taking unauthorized funds from the company, or a book-keeper has helped herself to money that she was not authorized to take – meanwhile many are unaware of that unauthorized payment.
 
Frankly, one mechanism to stop unauthorized payments from occurring can be undertaken right from the birth of the company: all cheques and payments ought to require two signatures from two authorized individuals.
 
Requiring more than one signature on a cheque is a simple means to ensure that one person does not go rogue on the company cheque book.  If the bank is initially made aware that two signatures are required, but a cheque clears with only one signature, the bank itself may be liable for allowing the payment to go through.
 
Of course, requiring two signatures on a cheque does not ensure that two people may not work in tandem with each other to defraud the company.  That said, if they were to do that, they could be civilly liable for, among other things, conspiracy and breach of their duties of honesty and good faith.  They may, as well, be held criminally liable for their actions if charges are laid.
 
To avoid that kind of conspiracy, it is important that independent accountants be retained to do financial statements that require a review of the company’s records, and to ensure that financial transactions in the company are legitimate and with authorization.  Redundancies in the accounting system, which require more than two pairs of eyes to review financial records of a company, can help ensure a company is not defrauded.
Barry Yellin
Barry Yellin
P: 905.572.5823
byellin@rossmcbride.com