Would you void a check in pencil?
Check voiding is a basic function in accounting, so you can imagine the surprise upon learning that a company with $6 million in revenues was voiding checks in pencil. To add to the risk, the word “void” was written in small letters in the center of a live, signed check. The writing could’ve easily been erased and presented at a bank for cashing. With remote deposit and electronic banking, the chances that it would be cashed are good.
A safer way to void checks is using permanent ink to write VOID in large letters over several areas of the face of the check. Void should be written on each section of the stub as well. There should be no question that the check is no longer legal tender. If the check is signed, cutting out and destroying the signature is a further safety measure.
Voided checks should be stored together in numerical order in a locked file drawer. Some accounting departments chose to attach voided checks to the bank statements in the month in which the void occurred. While this method is acceptable, finding the check for future reference can be cumbersome and does increase the risk of not properly accounting for checks in sequence. Storing voided checks together is a better choice.
Written procedures for voiding checks should be included in all accounting manuals and a member of the management team should randomly audit the process to ensure the procedure is being executed properly.
Fraud is often thought of as an elaborate plot, when in reality it starts with easy access. Voiding checks properly is a basic control to limit that opportunity.