No matter the trustworthiness of employees, accounts payable audits are vital as a safeguard from fraud at any firm. They're particularly essential, however, at companies with staff members who have histories of abuse of funds.
Back in April, the Journal Gazette reported that Steven R. Thorn, the former head of a Muncie, Ind.-based bank, had been accused by his most recent employer of embezzling $137,000. DIY Group, a packaging company also based in Muncie, hired Thorn in 2003, less than two years after he had been released from a 20-month prison sentence he served for fraud committed in his position as assistant vice president at a Muncie bank.
Thorn recently pleaded guilty to DIY Group's charges, according to the Star Press. The affidavit accused the Yorktown, Ind., man of exerting "unauthorized control" over company funds and alleged that he wrote corporate checks to relatives, as well as "additional and unauthorized payroll and vacation checks" for himself. Initially, DIY was going to keep Thorn on staff if he made restitution for the embezzled funds out of his own pocket. He stopped making those payments, however, and the company's management enlisted the help of law enforcement.
The case is a reminder of how essential AP audits and financial oversight are for firms that have made similarly risky staffing choices.