What controls should be put in place to protect the company’s assets from fraud?
Company assets such as inventory, equipment and vehicles are highly susceptible to fraud and need to be protected. Internal controls should be put in place to protect these assets.
Below is a discussion of the controls to be put in place to protect these assets:
- Inventory: Inventory should be kept in a secure area and access should be limited. An inventory management system should be used to track inventory movement. Inventory should also be counted regularly (annually at a minimum) and physical counts compared to internal records. Differences should be investigated.
- Equipment: Equipment records should be kept detailing purchase dates, cost and serial numbers. Policies should be implemented and followed requiring authorization for offsite use of equipment. Insurance coverage of equipment should be reviewed annually. High-value equipment should be kept in secured areas with access limited to authorized individuals. Owner/manager approval should be required for the purchase, disposal or sale of all equipment.
- Company Vehicles: Records should be kept detailing purchase dates, cost and serial numbers. Usage should be restricted to approved employees with clean driver’s abstracts. Mileage logs should be kept. Policies should be put in place to require approval for the personal use of company vehicles and pass liability to the individual.
Reviewing the above reports each period will help you identify irregularities and detect fraud.
If you would like more information on this topic, please contact a member of the EPR Maple Ridge Langley team by filling out the contact form below.
Canadian and foreign tax laws are complex and have a tendency to change on a frequent basis. As such, the content published above is believed to be accurate as of the date of this post. Before implementing any tax planning, please seek professional advice from a qualified tax professional. EPR Maple Ridge Langley, Chartered Professional Accountants will not accept any liability for any tax ramifications that may result from acting based on the information contained above.