Embezzlement within Small Businesses on the rise.

I know that it has been a while since the Enron fiasco; however embezzlement and accounting fraud still weighs heavily on the minds of small business owners. The simplest way to prevent embezzlement is through checks and balances. Checks and balances occur through separation of duties within the accounting department. For instance, must small business hire on bookkeeper to handle all of the bookkeeping duties. While this approach is cost effective, it could easily lead to embezzlement due to no checks and balances or separation of duties. The best way for the owner in the example to prevent fraud would be to have one or more employees manage accounts receivable, one or more employees manage accounts payable, one or more employees long-term assets, one or more employees manage long-term debt, and so on. The checks and balances system and separation of duties is an Accounting Practice Board (APB) accepted practice to prevent fraud and embezzlement in accounting. Or of course, the small business owner can use the other embezzlement prevention technique--hire your spouse, if you feel you can trust him/her. After all the main objective is to prevent loss of funds. You work hard, and you deserve all of your money.