When companies use AP audit resources as soon as suspicious accounting practices appear, they may save themselves large sums. The former hedge fund CFO at Westport, Connecticut, firm Turkel Investments was recently charged for the embezzlement of $1 million.
The Hartford Courant said that Darrin Foster, who had worked with the company since the early '90s, has been sentenced to three-and-a-half years in jail for his theft. Though he had been entrusted to manage the organization's finances, an AP audit discovered that between 2004 and 2010 he embezzled funds to pay for car rentals, vacations, electronics and other personal luxuries.
According to The Hour, Foster pleaded guilty to one count of wire fraud in 2012 and faced up to 20 years in jail on the charge. The source explained Foster used his employer's credit card for the purchases and subsequently paid the balance from company accounts.
Had fellow executives who worked alongside Foster called for an accounts payable audit sooner, he may have not had the opportunity to make such a large dent in the company's finances. While the solutions themselves are helpful, managers being perceptive and willing to take action is also key.