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NonCash Fraud

The Association of Certified Fraud Examiners (ACFE) issues a report to the nation every 2 years. This report is a global study on occupational fraud and abuse. The 2020 report can be found here.

According to the ACFE, noncash fraud has one of the highest risks for a small business. The median loss is approximately $98,000.

The following quick video discusses this type of fraud. While theft of cash is still one of the most sought after asset of a business, non-cash items are still subject to theft. From equipment to inventory, a business needs to ensure they have proper controls over all assets. Additionally, we discuss ways a business owner can mitigate internal control weaknesses. 

Transcripts to the above video:

Today we are going to talk about noncash fraud. Now noncash fraud is theft of inventory, equipment, services, etc. It is items that come out of the company that are not cash related now. This poses one of the greatest risk organization and averages about $98,000 per incident. Predominantly this occurs in the purchasing and sales departments. Now the best way to mitigate this is to obviously segregate your purchasing and accounting department. Inventory controls. You have to have control over the ordering process, receipt and release of the inventory are paramount.  Monthly inventory count and reconciliation to the accounting records. This will help mitigate this type of theft because you’re going to have two sets of records, and they’re going have to be reconciled between one another. And if there’s any discrepancies, you will be able to capture that an identify any possible theft that has happened on the noncash items. Now, any if you have any questions or feedback, please feel free to email me as steve@hovlandforensic.com. Or go to my website at hovlandforensic.com Thank you.

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