Vermont officials recently learned that accounts payable audits may not necessarily uncover embezzlement, according to the Burlington Free Press.
Tonya Drury, district cashier for the Bethel/Royalton Solid Waste Facility, pleaded guilty to an embezzlement charge in U.S. District Court last month. The misappropriation of $173,000 in cash receipts began in January 2005 and went undetected for a number of years because she altered the facility's computerized accounting records, which made everything appear normal to auditors.
"Audits are not designed to detect fraud," accounting consultant Gregory Bourgea told the news source. "They are designed at forming an opinion on the financial statements as a whole (and don't offer) absolute assurance about whether the financial statements are free of material misstatement whether caused by error or fraud."
Although AP audits aren't guaranteed to uncover misappropriation, they can highlight weaknesses such as a lack of checks and balances or an improper division of responsibility that can provide embezzlement opportunities or allow good faith mistakes to go undetected.