Petty cash funds must be monitored

Petty cash funds can prove to be excellent resources for businesses. As these accounts are generally used to take care of a company’s less expensive daily needs, they come in handy for reigning in a firm’s budget by reducing the costs involved with writing and cashing checks. However, if these accounts are not properly managed, they may become targets of internal fraud.

According to the Clarion Ledger, Linda Reed from Mississippi has been as a bookkeeper for the firm and is also accused of writing fraudulent checks.

WLBT-TV reported that Copiah County Sheriff Harold Jones said that more than $20,200 was discovered to be missing from the company’s petty cash fund.

The Institute of Internal Auditors noted that when it comes to these types of funds, using audit solutions is critical. The source stressed that petty cash funds are naturally susceptible to risk, which can come in several forms, including waste, human error and misappropriation. If a system is used to verify the accuracy of petty cash accounts, it is possible to plug potential leaks before they become severe.

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