Internal Control/Anti-Fraud Program Design for the Small Business: A Guide for Companies NOT Subject to the Sarbanes-Oxley Act

CHAPTER 12 The Roof Monitoring and Routine Maintenance

Trust but verify.

—President Ronald Reagan

THE FINAL STRUCTURAL ELEMENT of the anti-fraud program is monitoring and routine maintenance. A roof on a home protects the structure from the outside elements. In the same manner, the roof of our anti-fraud program, the monitoring and routine maintenance element, protects the structure through determining its stability (compliance with the program) and identifying areas in need of routine maintenance to keep the structure solid.

Imagine that you have finished building a home, moved in, and enjoyed several years of living in the fruits of your labor. One evening, you’re sitting in your living room watching television when you feel a drop of rain on your head. You look up and notice that you can see the sky through numerous holes in the roof. You say to yourself, “How on earth did that happen? I painstakingly built this home from the ground up. I laid the foundation, put in the floor, raised the walls, and weathered it in with the ceiling and the roof. Oh wait, I never had the home inspected and tested for soundness, and I really haven’t put any money into routine maintenance.” As you sit there getting wetter by the minute, you realize that it may be too late. Now you may have to start over and rebuild, this time the right way.

Such is the case with an anti-fraud program that has no monitoring and routine maintenance element. This element provides the very measure of stability ...