6) Understand the Voided/Deleted Transaction Fraud.

There are several key reports that help the business owner monitor activities when fraud is suspected.  A first level report is Voided/Deleted Transactions.  Those committing fraud commonly create transactions that are subsequently voided or deleted so the activity does not appear on the financial statements. With the appropriate user preferences set, users are not able to access this report themselves.  Another common fraud technique is to reconcile the bank account with a fraudulent transaction (e.g. a check listed to a legitimate vendor, made payable to the employee) that is then voided or deleted to cover the fraud.  The Previous Reconciliation Discrepancy report lists post reconciliation changes that cause a discrepancy.

7) Closing Data Exception Report

When I setup a QB company file I create a closing date for the end of a fiscal period.  Many users never notice there is a closing date until the system prevents them from making a change in a prior period.  There is the capability of over-riding the closing date, which is practical in many situations.  For example, a user may have transposed an amount on a deposit in December and not found the error until reconciling the bank statement in January.  However, these overrides should be few.  The Closing Data Exception Report provides the necessary data to determine who and when a closing date was overridden.

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Finally, QB has many other features that assist a business in protecting itself against the activities of fraudulent employees.  A business owner should feel confident that, by using the tools described in this article, fraudulent activities can be discovered within the QuickBooks company file.