Fraud Exposure Checklist for Businesses

Category: Business Fraud Awareness

By BankSource on 3/13/2026

It is very important that everyone in your organization is educated about fraud and how to spot red flags.

If you answer “no” to any of these questions, you may need to spend additional time evaluating your internal processes and controls to minimize the risk of fraud in your company.

7 Key Questions You Should Confidently Say "Yes" to:

Do bank statements arrive at your desk unopened?

Do you personally review bank statements every month?

Do you personally review daily account activity and check images online to identify irregular entries and payee information? If not, is this done by someone who has signing authority on the account(s)?

If you originate ACH or wire transfers, is there a second level of approval? Are there dollar limits in place?

Do you have an approved vendor list for your payables, and do you review it periodically? Do you have a direct contact at each vendor?

If you receive cash, do you have dual controls in place? Can you see that the cash actually made it to the bank in the deposit?

Do you review payroll reports and verify that payees and amounts are appropriate? Can you put a name and face with each payroll check or direct deposit?

Electronic Banking

Do you use Positive Pay for issued checks and/or ACH blocks and filters for electronic entries?

Do you have complete access to your online banking program? Do you use it daily?

Do you or a trusted administrator safeguard and monitor who can access the system and what they can see or do?

Does your Network Administrator require hard-to-guess passwords?

Do you have a policy in place to require that passwords be protected and never shared?

Do you require multi-factor authentication to access sites with sensitive information?

Do you review ACH and wire transfers (both outgoing and incoming) regularly?

Do you have a policy in place to revoke user access to the system when necessary?

Bank Reconciliations

Are bank reconciliations prepared:
• Monthly for all accounts?
• By someone other than the person authorized to sign checks or initiate other transfers?

Are all items on the bank account statement reconciled and accounted for?

Do you review bank reconciliations for cleared checks and for unusual items? Do you ensure the Payee on cleared checks has not been altered?

Are bank reconciliations reviewed and adjustments of the cash accounts approved by you to underline dual controls

Accounts Receivable / Payable Controls

Do you review accounts receivable aging lists?

Does someone who is not involved in general ledger or accounts receivable make the call for collections?

Are all sales orders recorded on pre-numbered forms and are all numbers accounted for?

Are monthly statements for outstanding balances:
• Reviewed by you?
• Mailed by you or a responsible employee other than the bookkeeper or accountant?

Are the checks to vendors matched against the invoice as well as proof-of-receipt of the product?

Other than for tax purposes, do you have regular outside audits?

Do you have a process in place to validate changes in account and routing numbers for vendors?

Check Stock

Are you a necessary signatory on all checks? Or do you require two signatures?

Are checks always pre-numbered?

Do you review cleared checks for missing or out of sequence numbers?

Is your check stock kept in a secure (locked) location?

Are all checks recorded as they are issued?

Is a mechanical check protector used to inscribe amounts as a precaution against alteration?

If a signature plate is used, is it only under your sole control? If not, is access to the plate controlled and used under double custody? Do you use it only when you must, rather than as the norm?

Are voided checks retained and then shredded or mutilated?

Are supporting documents (invoices, reports, purchase orders, etc.) presented to you with the payables checks and reviewed by you prior to signing the checks?

Are supporting documents for payable checks properly cancelled to avoid duplication?

Are checks payable to cash prohibited?

Is signing blank checks prohibited?

Are signed checks mailed by someone other than the person who writes the checks?

Is outgoing payables mail securely delivered to the Post Office rather than left in an "out basket" for anybody to walk by?

Cash Receipts

Do you, or a responsible employee (other than the Bookkeeper or A/R clerk):
• Open the mail and pre-list all cash receipts before turning them over to the bookkeeper?
• Compare daily pre-listing of cash receipts with:
· Cash receipts from journal?
· Duplicate deposit slips?
· Bank statement?

Are cash receipts deposited intact on a daily basis?

Are cash receipts posted promptly to appropriate journals?

Are cash sales controlled by cash registers or pre-numbered cash receipt forms?

Miscellaneous

Are annual one week vacations mandatory for all employees with access to books, cash, or receivables duties?

Are employees cross trained so no one individual is always responsible for a specific duty without oversight?

Do you have a secure or encrypted way to send emails that contain sensitive information?

Do you know who your bank contact is and do you have their direct line? Do you know who their back up is?

Do you have a Post Office box?

If you have any questions or need help reviewing your current fraud prevention and security procedures, please contact the BOS Business Services Team.

If you notice suspicious or fraudulent account activity, please call us immediately at 877-698-3278.

Please be aware that this is not an "all inclusive" list of potential risk areas and is intended to spur your thoughts and further action. Fraud is a serious, expensive, and time-consuming event in your business and we want to help you avoid it if possible!

We urge you to meet with your CPA, your banker, and other fraud prevention professionals to further discuss and evaluate this important area.

Tags:

Select a Category

All Categories

User Name:
Password:

Username:
Password: