Daniel Cullinane CPA

2500 Plaza 5 25th fl  Jersey City NJ 07311                                                          phone 732-516-1648  fax 732-516-9778

                 MBA TAXATION                                                                                                         

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​SEVEN SIGNS OF ACCOUNTING FRAUD

Daniel Cullinane CPA

25 Plaza 5 25th fl Jersey City NJ                                          phone 732-516-1648 fax 732-516-9778

MBA Taxation

​Many small business owners feel that their companies are immune to internal accounting fraud and embezzlement for two reasons: they do not have many employees, and the one who deal with the money are usually close to the owners. Regardless of size any business is vulnerable to fraudulent activities. Following up on signs of fraud can stop accounting theft, saving a company from financial loss or ruin. The signs are:


An in-house accountant works without direct supervision on every aspect of a company's financial operations. When one trusted bookkeeper is responsible for records, payroll,receivables, deposits, payments,ect the company is at risk for fraudulent activity.
An in-house accountant refuses to follow recently established accounting and or payroll guidelines. In such a case, owners should demand that the guidelines be strictly followed and investigate financial and payroll records for up to several years in the past.
An accountant continually works after hours, comes in frequently on weekends or insists on taking work home. Fraudulent activity is easier to accomplish when work is unobserved and unsupervised.
An accountant refuses to take a vacation. This individual may be thought of as a dedicated and hard working employee, but could be that they simply does not want anyone to look at the books.
An accountant insists that he or she handle activities other departments are normally responsible for. These include picking up the mail, acting as the sole contact with the company's financial contacts.
The accountant continually misfiles important items such as payroll receipts, deposit records and supplier correspondence
Deposits frequently seem too small. Owners should always carefully monitor income and deposit, comparing sales against deposits.​

​ Usually there are no sure fire tip offs to internal accounting fraud, but by being on the lookout for any of the seven signs, a small business can avert a potentially disastrous and embarrassing financial loss