1. Certified Public Accountants and Consultants Connecting depth and insight with community values

2.  Business risks – ◦ Competition ◦ Economy ◦ Rising costs ◦ Don’t forget fraud  Average business will lose 5% of revenue to employee theft (ACFE)

3.  Billing  Check fraud  Skimming cash  Payroll  Employee theft  Embellished expense reports

4.  Family-owned business risks ◦ Same as small business – only more complicated  Family-owned business fraud ◦ Same as small business – only more complicated  “Jack of All Trades, Master of None”  Sense of duty has declined while sense of entitlement has grown

5.  Reduces your risk of fraud  Protects your assets  Banks and lenders require  Accurate (and timely) financial reporting  Increases efficiency in your growing business  Reduces costs – tax and audit

6.  It does not need to be costly  Focus on your biggest risks first  Always keep the characteristics of fraud in mind  Install and monitor controls  Internal controls are a process

7.  Segregation of Duties ◦ Separate recording, authorizing, and reviewing ◦ Should be designed for your organization  Technology ◦ Direct correlation between technology and fraud ◦ Technology is not static  Communication

8.  Avoid signature stamps if possible  Dual signatures on checks  Review payroll registers  Set expectations, guidelines, and lines of communication = build trust  Trust is important but it is not a control

9.  What are our biggest risks?  What is the most effective way to reduce risk?  What is the most efficient use of our resources?

10. Jennifer Files, CPA jennifer.files@yhbcpa.com Yount, Hyde & Barbour, P.C. 50 South Cameron Street Winchester, VA 22601 (540) 662-3417