After a carefull year of not taking on too much job risk, I found out my office manager was embezzelling.
Not making the IRS payments (although I signed these checks), writing checks to herself while entering them in Quickbooks as vendor payments and cashing checks from the service techs at some other bank, and paying personnel bills with the company credit card.
I checked a couple of times a week on quickbooks for accounts receivable and payable, cash on hand, etc. Everything looked ok (I think she'd done this before). Then the credit card was refused one Saturday. Went to the office and couldn't find any statements, then went on-line and sure enough I'd exceeded my limit. Looking at the expenses, she'd been paying personnal bills with it. This was the tip of the iceberg. No need to go a lot further, as I think you get the gist.
Learnings:
1. Get and Open ALL your mail personnally.
2. Don't have a stamp with your signature.
3. Get weekly listings of sequential invoice numbers, with amounts. Every 'missing' sequential number needs an explanation and entry in the books.
4. Don't pay bills online.
5. Don't believe what the computer says, "figures don't lie but liars figure".
6. Make your own bank deposits.
7. Don't use your CPA brother-in-law for your books.
7. Beware of an employee who brings donuts on Friday's.
