3.3 Implementing Internal Controls Over Cash
Types of Theft and Fraud
Cash is highly transferable, meaning it has a high degree of liquidity, which also means it’s easy to steal. The U.S. Chamber of Commerce estimates that embezzlement alone costs businesses $4 billion a year, showing that perhaps even the most trusted employees aren’t immune to the temptations that come with handling cash.
Liquidity describes a company’s ability to meet debt payments and operating expenses.
Embezzlement is the process of stealing cash from a company while trying to cover it up by omitting transactions or otherwise falsifying accounting records.
This subchapter deals with setting up a system of policies ...