The most common characteristic in employee embezzlement cases is a lack of checks and balances. A lack of checks and balances is the framework within which embezzlement is allowed to thrive until an outside event triggers a discovery. Checks and balances should occur before a transaction to prevent errors and after a transaction to verify it was handled properly. Checks and balances means that the person that processes a transaction should not reconcile or verify the accuracy of that transaction.

In one example, a paralegal would prepare paperwork and checks (including using a signature stamp) for real estate transactions. The lawyer would verify the paperwork and checks before the transaction. After the transaction, the lawyer would give the file, including checks that needed to be mailed out, to the paralegal. The paralegal would then void a couple of smaller checks and re-write herself checks in the exact same dollar amount. The paralegal reconciled every file. The paralegal reconciled the account monthly. The paralegal opened the bank statements. On the rare occasion that the lawyer checked the bank records, he only looked at the dollar amounts. If a call came into the office questioning a payment, the paralegal would take the call, "research the issue", and respond. In this environment, the embezzlement thrived for almost a year.

Every office must have a system of checks and balances both before and after a transaction. In this scenario, the last check by the lawyer was before the transaction. The person that processes a transaction should not be responsible for reconciling the account. In no situation should a person that handles a transaction be allowed to research a complaint about that transaction.