Detecting Fraud in Organizations: Techniques, Tools, and Resources

Chapter Seven

It All Comes Down to Cash

Yesterday is a canceled check; tomorrow is a promissory note; today is the only cash you have—so spend it wisely.

—Kay Lyons, author

In all instances of fraud, whatever the scheme or scenario, the result must translate into some monetary value to create the fraud’s rationale. Who are the people in the organization? What access do they have to cash (value)? What level of trust has the organization bestowed on them? The organization must put in place the right tools to prevent fraud when dealing with cash—not only in the form of currency, coin, and money orders (which are often the most difficult forms of cash to recover or use to prove intent) but also items and transactions that are convertible into cash. A simple “Oh yeah, I forgot to put the cash in the drawer or prove that I received it” can make intent difficult to prove. You’d better have a camera and/or an eyewitness for the documentation of cash, since it will most likely not be evident once it has been removed. Add to the complexity the necessary proofs associated with cash, paper checks, electronic checks, automated clearinghouses, electronic fund transfers, lockbox deposits, the factoring of collections through third parties, sweep accounts, debit memos, credit memos, debit cards, credit cards, gift certificates, gift cards, and loan payments—and all often coming out of the organization’s one main account—and you have created a multitude of opportunities for the potential fraudster. ...