Embezzlement can go from simple overloading of expense accounts, to payments made to non-existent suppliers, to complicated juggling of the company books. Inventory shortages are increasing in size or frequency. Employees refuse vacations or promotions. Business patterns change when a certain employee is absent. Customers complain about errors in monthly statements.
Employees seem sensitive to routine questions about procedures.
Your best defense is frequent and thorough inventory control. Limit employees' access to stock and inventory records. Occasionally check trash bins. Conduct periodic, unexpected inventory checks to dishonest employees know they run the risk of being caught by surprise. Employees frequently associate with vendors or suppliers.