The purpose of this qualitative study was to gain greater understanding of the current practices of the internal control systems of small businesses and to explore the effectiveness of their systems in comparison with anti-fraud activities recommended by forensic accountants. The researcher selected five small businesses that were members of the Central Louisiana Regional Chamber of Commerce and had fewer than 100 employees. The researcher interviewed the owners and/or managers of the businesses, reviewed and analyzed company documentation, interpreted data, made observations, and offered recommendations. The researcher asked each participant to respond to questions related to the five elements of the model developed by the Committee of Sponsoring Organizations of the Treadway Commission (COSO): control environment, risk assessment, control activities, information and communication, and monitoring. The researcher discovered that there were more internal controls utilized by the businesses that participated in this study than were depicted in a review of current literature. Also, the researcher identified several themes of best practices of internal controls: anti-fraud training; written code of conduct; risk assessment; hiring and onboarding process; approval processes and authorization levels; separation of duties; information and communication; and monitoring. Further, the researcher made six recommendations for action: establishing internal controls; addressing personnel issues; conducting anti-fraud training; revising personnel manuals; assessing risk; and monitoring COSO standards. This study should assist small business owners and/or managers achieve their organization's objectives and make a significant contribution to the local economy.
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