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STRATEGIC
ISSUES...ONLINE
For week of October 10, 2005, Issue #232
Featured Articles:
1. Are Your Financial
Records Safe?
2. Focus on Fraud:
Understanding Symptoms/Red Flags of Fraud - Accounts Payable
Process
3. Tech Tip Weekly:
Wrap Text Around an Object in MS Word
4. Compliance Calendar
1. Are Your Financial Records Safe?
The recent hurricanes along the
Gulf Coast are a tragic reminder of how easily we can lose
essential tax and financial records. Few places in the United
States are free from some type of natural disaster, whether it's a
hurricane, flood, tornado, wildfire, or an earthquake. Even a
house fire can destroy important records.
After a disaster, you're more
likely than ever to need certain records. You'll likely be filing
insurance claims, perhaps applying for a new mortgage, or taking
out personal loans. You may even have lost the records you need
to file your next tax return.
It's smart to take the time to
identify key records, make copies, and find a secure place to
store them. Here are some suggestions to get you started.
What records do I need?
-You don't need to copy every tax
and financial record. Your banks, credit card companies, and
investment brokerages will have records of your accounts and can
probably supply details of recent transactions if needed. Your
employer will have current payroll records, and IRA or 401(k) plan
trustees will have details of your accounts.
-Keep a master list of all account
numbers, with a contact phone number for each. That will make it
easier to recover information after a disaster. If you handle
transaction online, include your user ID and passwords.
Keep copies documenting the
purchase of your home or investment properties. Also keep records
of expenses for remodels or other improvements that change your
cost basis in the property.
-Your broker should have details of
your original investments in stocks or bonds, but copy details of
any investments you purchased independently. That includes
numbers of U.S. savings bonds that you own.
-Make sure your will and estate
planning documents are stored safely, either at your lawyer's
office or in another secure place.
-Consider keeping copies of your
last three years' tax returns, even if your CPA has duplicates.
And finally, include a recent backup disk from your home computer.
Where should I store them?
-There's no single answer for every
situation. A bank safe deposit box should protect against most
disasters, although it could be vulnerable to flooding. Sometimes
a fireproof home safe is sufficient. You could even consider
storing key records at a relative's house in a different region,
although you need to safeguard against theft.
Wherever you decide to keep your
records, take the time to prepare now.
2. Focus on Fraud. Understanding
Symptoms/Red Flags of Fraud - Accounts Payable Process
Understanding symptoms of fraud is
the key to detecting fraud, and even better to providing systems
and controls to prevent fraud in the first place.
A symptom of fraud may be defined
as a condition which is directly attributable to dishonest or
fraudulent activity. It may result from the fraud itself or from
the attempt to conceal the fraud.
The following is a small
representative sample of examples of symptoms of red flags of
fraud in the accounts payable process, keeping in mind that proper
systems and controls will work to prevent fraudulent activity:
-Recurring identical amounts from
the same vendor
-Multiple remittance addresses for
the same vendor
-Vendor addresses do not agree with
vendor approval application
-Payments to vendor have increased
dramatically for no apparent reason
-Systematic pattern of adjustments
to accounts payable for goods returned
-No reconciliation performed of
accounts payable subledger to general ledger control account.
3. Tech Tip Weekly: Wrap Text Around
an Object in MS Word
MS Word gives you lots of
interesting opportunities to wrap text around text boxes,
graphics, drawing canvases, and other objects in a document. By
playing with the different ways to wrap text, you can create very
sophisticated layouts. When you wrap text, you pick a wrapping
style and the side of the object around which to wrap the text.
The fastest way to wrap text is to
select the object around which text is to be wrapped, click the
Text Wrapping button, and choose an option from the drop-down
list. You'll find the Text Wrapping button (which has a dog on
it) on the Picture or Drawing Canvas toolbars.
4. Compliance Calendar
October 13
-Employers deposit Social Security,
Medicare and withheld income tax for payments October 5, 6, and 7.
October 14
-Employers deposit Social Security,
Medicare and withheld income tax for payments October 8, 9, 10,
and 11.
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