Chapter 20

Helping Small Businesses Prevent Fraud

In This Chapter

arrow Reviewing what internal controls are

arrow Recognizing frauds frequently affecting small businesses

arrow Putting internal controls in place

arrow Reacting after a small business client is victimized

Big frauds that take place in big businesses are the stuff headlines are made of. (Enron, anyone?) But as horrid as those major frauds can be, they don’t occur nearly as frequently as smaller frauds that chip away at the financial health and the integrity of a company of any size.

In the next chapter, we focus on how large businesses can steel themselves against fraud. Here, our focus is small businesses: those that bring in less than $250 million in revenue each year. We remind you what the all-important phrase internal controls refers to, and we show you the types of frauds that small businesses are most likely to face. We discuss specific fraud-deterrence techniques that forensic accountants can help small businesses establish to reduce the probability of fraud. Finally, we explain what you can do if a small business client is victimized. ...

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