Research & Analysis #1

Research/Analysis #1

You are making a signature stamp for checks received by your business. What should it say? Why? 

Every check needs 2 signatures for being paid. "Maker" should sign front as well as "drawer" signs back. These rules have been similar for the stamped signatures on the checks.

Signature Required

The signature may be handmade, made through the rubber stamp, printed through the computer or another device. The signature can be made (i) manually or through means of the device & machine and (ii) through use of any name, involving the trade or the assumed name, or through the word, the mark & the symbol executed or adopted through the person with current intention towards authenticating the writing.

Negligence

As per Section 3-406 of UCC, when the person or the business leaves check stock as well as signature stamps unsecured, they may not assert the damage through forgery even when they may prove intent on part of forger.

Common Practice Safeguards

Though not the rule, as the general practice, stamped signatures on back of the checks involve words ‘For Deposit Only.’ This tells bank not provide cash to person who shows check for the payment.

Forgery

The person or the bank accepting the forged check with the stamped signature should prove somebody has used the stamp without permission as well as with intent to steal. 

What internal procedures should businesses implement to avoid being victimized by the fictitious payee rule? 

Internal auditors involve fraud detection responsibility through exercising the due professional care as well as being aware about signs and indicators of the fraud and also alert to the signs of wrongdoing, errors & omissions, the inefficiency, the waste, ineffectiveness as well as conflicts of the interest. They consider possibility of the noncompliance with the policies, the procedures, laws and regulations. They review systems used for safeguarding the assets from many kinds...