The following are findings which I have identified when investigating fraudulent activity that enabled the "perp" with the crime, or that have contributed to significant losses incurred:
1. Lack of segregation between entry processing, approval, and reconciliation.
2. Lack of monitoring/secondary review of reconcilation or outstanding items by a knowledgeable supervisor.
3. Lack of proper or adequate training of responsible employees impairing their ability to recognize suspicious activity or entries.
4. Lack of monitoring process to ensure all balance sheet accounts are properly and timely reconciled and are subject to review.
5. Lack of established controls to ensure all entries to income/expense accounts are properly approved and supported by valid documetation.
AND finally -
6. Lack of written policy and/or procedures for certain accounts (such as Due From/OREO/Fixed Assets/Prepaids) to ensure entries are processed in accordance with GAAP and outstanding items are handled accordingly.
An error is not a mistake until you refuse to correct it