Larry’s Laws of Larceny- Law 1: If Often Starts with Credit Card Charges

Larry Beebe, CPA

As auditor’s, we have found that most theft or embezzlement (defined as the misappropriations of funds placed in one’s trust or belonging to one’s employer) starts with small amounts. The thief steals a small amount, is successful, and that often leads to larger amounts being stolen.

A place that many thieves start is with credit card charges. They turn in phoney bills or receipts and get away with it. With success their confidence grows and they look for additional ways to steal.

While examining a company’s credit card charges, I found a meal for four people charged to the company. One of the four people listed as attending the meal was me. I knew I had not attended the meal, so I looked up the date on the calendar. It was a Saturday. I confronted the company president who admitted that he had taken friends to dinner, and had submitted the bill as a reimbursable expense. It was a small amount, but it lead me to question the overall integrity of the individual.

Trustees can minimize credit card theft by insisting that all credit card charges be audited by someone other than the person seeking reimbursement for the charge.

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