Warning Signs of Embezzlement
Here are some warning signs that embezzlement is taking place:
- Increase in overall sales returns might represent a concealment of
accounts receivable payments.
- Unusual bad-debt write-offs could be covering up a fraudulent scheme; a
decline or unusually small increase in cash or credit sales could mean that
some sales are not being recorded.
- Bounced business checks could indicate that funds are being siphoned out
of your bank account.
- Inventory shortages could indicate fictitious purchases, unrecorded sales,
or employee pilferage.
- Profit declines and increases in expenses could be a sign that cash is
being siphoned off illegitimately.
- Slow collections can be a device to mask embezzlement.