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, we recommend that you spend some time evaluating your internal processes and controls to minimize the risk of fraud in your company. Your BOS business banker can help identify processes that could be improved with cash management services.

Electronic Banking

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)?

Do you use Risk Management Services (formerly 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?

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

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?

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

Bank Reconciliations

Do you receive your bank statements electronically? If not, do they arrive at your desk unopened?

Are bank reconciliations prepared by someone other than the person authorized to sign checks or initiate other transfers?

Do you review bank reconciliations for cleared checks and for unusual items?

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

Check Stock

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

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

Do you ensure the Payee on cleared checks has not been altered?

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

Are all checks recorded as they are issued?

If a signature plate is used, is it only under your sole control? If not, is access to the plate controlled and used under dual control?

Are voided checks retained in a locked facility until shredded?

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 checks payable to cash prohibited?

Is signing blank checks prohibited?

Is outgoing payables mail securely delivered to the Post Office rather than left in an "out basket" for anybody to walk by? You should also not utilize a post office box on the street.

Accounts Receivable / Payable Controls

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?

Are monthly statements for outstanding balances reviewed by you?

Are statements and signed checks 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?

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

Do you review payroll reports and verify that payees

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?

Do you compare daily pre-listing of cash receipts with cash receipts from journal, duplicate deposit slips, and bank statement?

If you receive cash, do you have dual controls in place?

Can you see that the cash made it to the bank in the deposit 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?

Are employees cross-trained so no one individual is 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?

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

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

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.

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