Page 23 - How Not To Cook The Books Article

Ideally, some forms of checks and balances should exist within the
operating procedures of a company especially one which employs over
500 people and by any measure should be classed as a large business

for example the following controls could have been used:

Control 1: Wrekin Construction could have had a board of directors with
at least one independent director. This director could be a second
authorization (signer) for major transactions, such as the “payment” to
Britannia Management Services and Equatrek. An independent director

would have questioned these payments to Britannia Management
Services and Equatrek, since these companies were owned by Unwin
and were made at a time when Wrekin was under such severe financial
pressure and unable to pay its bills. Anecdotal comments appear to
support the existence of the practice of unethical extraction of revenue

from Wrekin through the sale of undervalued equipment.

Control 2: Require second signature on all major expenditure. The
problem with this is that if it is not a Non-Executive Director acting as
second signatory then it would be likely that the second signatory would
be Ibbotson.