During an audit, your CPA firm assesses risk of misstatement, identifies control deficiencies, and reports findings to the management and the governing body. Management and the governing body then assess risk of misstatements due to fraud or errors and determine what controls the organization needs.
One area prone to fraud is the disbursements process. While you should first perform a cost-benefit analysis prior to implementing new controls, there are some controls over disbursements to consider that require minimal investment. Baker Tilly’s audit team encourages you to consider implementing the following low-cost controls over disbursements:
Fraud can take many forms. It’s important to continuously assess the environment your organization operates in, including an environment with increasing electronic commerce and filing systems. New forms of financial transactions create opportunity for errors that may be intentional or unintentional. Ensuring there are adequate controls over both traditional and electronic processes and periodically reviewing those controls can help mitigate your susceptibility to fraud.