Where concealment begins.
WHY IT MATTERS DISPROPORTIONATELY
Almost every serious misconduct requires records to be falsified.
WHAT ACCURATE RECORDS REQUIRE
Transactions recorded as they actually occurred Supporting documentation retained No transactions off the books No entries describing something other than what happened
WHAT FALSIFICATION INCLUDES
Invoices for services not provided Payments described as something else Revenue not recorded Expenses recorded in the wrong category to conceal their nature Backdated documents
WHY BACKDATING DESERVES SPECIFIC MENTION
It is common, it appears harmless, and it is falsification.
WHAT TO ESTABLISH
That nothing is recorded other than what actually happened.
WHAT OFF-BOOK FUNDS CREATE
The means for every other kind of misconduct.
WHY
Money nobody records can be used for anything.
WHAT TO ESTABLISH
That all funds pass through recorded accounts.
WHAT TO BE ALERT TO
Cash transactions without documentation Accounts nobody reconciles Suspense and clearing balances that persist Adjustments made without explanation Documents that cannot be produced
WHY PERSISTENT UNEXPLAINED BALANCES
They are where problems are parked.
WHAT TO ESTABLISH
That every balance is explained and reconciled.
WHAT TO REQUIRE
Supporting documentation for every payment.
WHAT TO NEVER ACCEPT
Payments authorised without knowing what they are for.
WHAT TO ESTABLISH ABOUT PRESSURE TO ADJUST RESULTS
That it is refused.
WHY
Manipulating reported results is where financial misconduct typically begins.
WHAT TO PROTECT
The independence of whoever prepares the accounts.
