Periodically review the work of every employee, particularly those serving an accounting or bookkeeping function. It is the most trusted employee who can do the most harm. Create a system of checks and balances. Have at least two people examine the bank statement and returned checks each month. Don't let the employee performing accounts payable and accounting balancing receive the bank statements.
Embezzlers cover their tracks by removing and destroying original checks returned by the bank.
Make employees take at least one annual vacation of at least one week duration. During the vacation, have another employee perform the work of the absent employee. It's difficult for an embezzling employee to keep up the fraud during an absence. Never sign a check unless the payee is typed or written in the payee line and the amount filled in. Never sign blank checks before taking a leave of absence.