Voided transactions are sometimes necessary in the ordinary course of business. However, in some cases, these transactions could allow fraud to go unnoticed. Management should investigate voided transactions periodically to ensure no wrongdoing is taking place.
Voided transactions on the revenue side, possibly with a point of sale system or admissions tracker, should be investigated – what was the reason for the void and was it adequately documented. Pay special attention to patterns such as an excessive number of voids with the same employee or at the same time.
Voided transactions on the expense side should be similarly investigated, including tracing the transaction entirely through the process within the accounting system, original check, and bank statement.
In all cases, documentation and follow-up are essential – setting the tone that management will regularly examine these transactions should discourage fraud or abuse of this override.