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How to prevent a fictitious employee from being paid?

This is a key risk for any company and the best way to prevent this risk is to have proper segregation of duties. What this means is that you should separate the approval process for hiring employees, the accounting process for paying employees, and the actual person that distributes paychecks to employees.

As long as one person doesn’t have the ability to perform 2 or more of those actions, then proper segregation of duties in the HR cycle is low and the risk is reduced!


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