Lastly, the board and senior management should set the organization's priorities and goals, keeping the nonprofit focused on achieving its mission. Accounting Controls Accounting controls are the procedures used to safeguard the nonprofit's assets. Proper accounting controls also provide reliable and accurate financial records. Both of these goals enable the board and senior management to monitor the organization's financial operations. Authority and approval procedures require the identification of who has the authority to perform and approve certain transactions, such as approving invoices, expense accounts, signing checks, and dispensing supplies.
Organizations often ignore the early signs of wrongdoing.
If the proper controls are in place, the systems should alert someone to possible fraud. Unfortunately, people tend to ignore the early warning signs and let the deceit continue. Everyone must follow the established procedures for the controls to work. Any deviation from the system will enable someone to defraud the organization successfully. Good risk management may prevent a financial loss or catch the culprit early in the process, thereby minimizing the loss.