Management of specific corporations may well experience incidents of stocks losses as a result of misappropriation of assets by its personnel, i.e. their personnel stole the company’s stocks for private advantage (i.e. private usage/ {personal} income soon after promoting it out).
Let us go over with each other on What Could Go Wrongs (“WCGW”) inside the internal {control} system that may well lead to the business exposure for the threat of fraud:
- CCTVs not installed in warehouse
- stock take will not be performed frequently (i.e. stock take on a half-yearly basis)
- physical stocks are certainly not stored in secured area
- physical stocks are certainly not stored in secured area
- ineffective process in replacing inwards/outwards of stocks into stocks file
- quantities and movement of provision stocks / obsolete stocks are certainly not kept tracked (note: these stocks commonly carry scrap worth, and could be misappropriated if there’s no right record)
The list above will not be exhaustive and it can be for reference only
From management point of view, there are some {areas} / types of procedures will need to become carried out after they had seasoned / experienced fraud with regard to their physical stocks:
- strengthen accountability with the personnel by assigning unique area of stocks of unique personnel
- quantities and movement of provision stocks / obsolete stocks are certainly not kept tracked (note: these stocks commonly carry scrap worth, and could be misappropriated if there’s no right record)
The list above will not be exhaustive and it can be for reference only
From management point of view, there are some {areas} / types of procedures will need to become carried out after they had seasoned / experienced fraud with regard to their physical stocks:
- strengthen accountability with the personnel by assigning unique area of stocks of unique personnel
- employ strict safety access for the warehouse
- impose penalty on all warehouse personnel though there’s material stock differences ( e.g. penalty on warehouse personnel if stock-take distinction is better than 0.5% of total stocks)
- impose penalty on all warehouse personnel though there’s material stock differences ( e.g. penalty on warehouse personnel if stock-take distinction is better than 0.5% of total stocks)
- safety guard to execute check on employee’s bags ahead of enabling the personnel to leave the premises
- assure that stock-take is performed frequently and any stock-take distinction is investigated
- assure that stock-take is performed frequently and any stock-take distinction is investigated
- set up CCTV inside the warehouse and execute random check on specific time slots
