Term
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Definition
| The theft of cash from a victim entity prior to its entry in an accounting system |
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Term
| Because the money stolen is never recorded on the books |
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Definition
| Why are "off-book" schemes difficult to detect? |
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Term
| Sales Skimming; one of his clients wanted to file an insurance claim, but she never received a billing statement. Her appointment was never recorded, which led to the company finding out about Lee depositing her payment into his personal bank account. |
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Definition
| Why type of fraud did Brian Lee, the plastic surgeon,commit in the case study titled "Shy Doc Gave Good Face"? How was his fraud discovered? |
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Term
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Definition
| Of the three major categories of occupational fraud, which is the most common? |
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Term
1) Cash schemes
2) Non-cash schemes |
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Definition
| What are two categories of asset misappropriations? |
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Term
| Cash schemes are more common, but they have a lower median cost than non-cash misappropriations |
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Definition
| Which of the two subcategories of asset misappropriations is more common? |
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Term
1) Skimming
2) Cash larceny
3) Fraudulent disbursements |
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Definition
| Cash schemes are divided into what three categories? |
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Term
| Fraudulent disbursement schemes were the most common and caused the greatest median loss |
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Definition
| Which of the three categories of cash schemes was the most common and which had the greatest median loss? |
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Term
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Definition
| Type of fraud that occurs when an employee makes a sale of goods or services to a customer, collects the customer's payment at the point of sale, but makes no record of the transaction |
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Term
1) Ring a "no sale" or other noncash transaction
2) Rig the register so that sales do not print
3) Remove the tape from the register |
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Definition
| What are some of the ways an employee can manipulate the cash register to conceal a skimming scheme? |
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Term
1) Match the register tape with the money in the register
2) Check for breaks in the sequence of transactions
3) Look for "no sale" on the register tape |
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Definition
| What are some ways to detect fraud committed on a cash register? |
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Term
| An off-site apartment manager can remove the cash-paying tenants from the books to make it appear that the apartments are vacant. The manager can then pocket the cash without late notices being sent to the tenants |
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Definition
| What is one example of skimming by off-site employees? |
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Term
| In one case, an employee wrote receipts to customers for their purchases and removed the carbon-paper so no receipt was given to the company. She then used a pencil to prepare company copies that showed lower purchase prices |
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Definition
| Give an example of understated sales. |
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Term
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Definition
| Type of fraud that occurs when an employee steals incoming checks instead of processing them |
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Term
1) Video surveillance at cash entry points
2) Place cash registers in one "cluster" area
3) Offer discounts to customers that do not get a receipt at the time of purchase
4) Record log-in and log-out times of each user on each cash register |
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Definition
| What are some ways to prevent sales skimming? |
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Term
| He stole all of the Route Deposits received from the drivers and used Office Deposits to cover up the stolen amounts (Lapping scheme) |
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Definition
| How did Stefan Winkler, director of accounting and controller, steal money from the beverage company he worked for? |
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Term
1) Lapping
2) Force Balancing
3) Stolen statements
4) Fraudulent write-offs or discounts
5) Debiting the wrong account
6) Document destruction |
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Definition
| What are the six techniques used to conceal receivables skimming? |
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Term
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Definition
| This technique is one of the most common methods of concealing receivables skimming |
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Term
1) Someone discovers the scheme
2) Restitution is made to the accounts
3) Some concealing entry is made to adjust the accounts receivable balances |
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Definition
| Lapping can continue indefinitely unless one of three things happens. What are these three things? |
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Term
| By forcing the total on the cash account, overstating it to match the total postings to accounts receivable |
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Definition
| How does one conceal force balancing? |
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Term
| If an employee steals a customer payment, the payment will not be posted to the account and the customer will receive late notices. To prevent the fraud from being detected, the employee will sometimes have the statements sent to his/her own address. The employee then alters the statements and sends them to the customer |
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Definition
| One of the techniques used to conceal receivables skimming is stolen statements. What is meant by stolen statements? |
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Term
1) Debit exiting or fictitious accounts receivable
2) Write off the receivables as bad debt expense
3) Post entries to contra revenue accounts such as "discounts and allowances" |
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Definition
| What are some entries that an employee could make to conceal receivables skimming? |
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Term
1) Separation of duties
2) Make employees take vacation time
3) Rotate duties among employees |
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Definition
| How can receivables skimming be prevented? |
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Term
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Definition
| A classification system that accounts for most, it not all, of the most common occupational fraud and abuse schemes |
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