(previously posted at my other blog, Nonprofit Update)
See this article for a sad illustration of disbursement fraud. The specific technique was opening credit card accounts in the name of the company and then using the account for personal expenses.
As the author points out, a review of the credit card statements would be useless because their existence was hidden. However, a careful review of bank statement may have identified this fraud earlier, perhaps several hundred thousand dollars earlier. It is very possible that an independent review of the bank statements could have detected this fraud very early on. This is one illustration of the reason I recommend to my clients that they have someone other than the bookkeeper review the bank reconciliations. See my post here.