Accounts payable audits are effective tools for detecting and uncovering financial discrepancies such as embezzlement, duplicate payments and other instances of misappropriation. Thanks to an AP audit at the Kansas Truck Center in Topeka, Kansas, an employee's embezzlement scheme was uncovered.
The Associated Press reports that Jamie Wood, who served as a parts manager for the business, was arrested and charged with one count of mail fraud after it was discovered that he had taken more than $500,000 from the center. After pleading guilty to the count against him, Wood was sentenced to one year federal prison.
The investigation revealed that Wood managed to steal the money by creating false invoices for fake companies, according to the Salina Journal. The Kansas Truck Center then sent checks to these firms, believing they were legitimate vendors. However, the business never received the goods and services it had paid for, which led to the audit. It was discovered that one of the fake companies was under the name of a personal friend of Wood.
Businesses can use accounts payable audits to uncover any illegal activity, and recovery audits can be conducted to determine how much money is owed.