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Chapter 4: Cash Larceny

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Chapter 4: Cash Larceny . Cash Larceny . Larceny is the least common of the three major cash misappropriation categories. 45 cash larceny cases were reported, with a median loss of $22,000. . What is Cash Larceny? . Definition: Intentional taking Of employer’s cash

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cash larceny
Cash Larceny
  • Larceny is the least common of the three major cash misappropriation categories.
  • 45 cash larceny cases were reported, with a median loss of $22,000.
what is cash larceny
What is Cash Larceny?
  • Definition:
    • Intentional taking
    • Of employer’s cash
    • Without employer’s consent
  • “Cash” includes currency and checks
cash larceny v skimming
Cash Larceny v. Skimming
  • Skimming is theft of off-book funds
  • Cash larceny is theft of on-book funds
  • Cash larceny:
    • Less common than skimming
    • Less costly than skimming
    • Direct audit trail
cash larceny schemes
Cash Larceny Schemes
  • Theft of cash on hand
    • From cash register or cash box
    • Posted customer payments
  • Theft from the deposit
theft of cash on hand
Theft of Cash On Hand

Concealing larceny of cash on hand

  • Unconcealed
  • Personal check in register
  • Reversing transactions (voids/refunds)
  • Alter cash counts
  • Destroy/alter transaction records
cash larceny from the deposit
Cash Larceny from the Deposit
  • Perp usually in charge of daily deposit
  • Steal the currency, deposit the checks
  • Poor controls are the key
    • One person prepares/makes deposit, reconciles bank account
    • Failure to reconcile deposits/receipts
    • Deposit left unattended before going to bank
concealing larceny from the deposit
Concealing Larceny from the Deposit
  • Deposit lapping
    • Steal Day 1 deposits
    • Cover with subsequent receipts
  • Deposits in transit
    • Missing money carried on books as “deposits in transit”
cash larceny countermeasures
Cash Larceny - Countermeasures
  • Investigate shortages in cash drawers, deposits, etc.
  • Investigate missing or altered sales records
  • Have two people independently verify deposits on bank statement to postings in general ledger
  • Maintain and review daily cash availability amounts
cash larceny countermeasures10
Cash Larceny - Countermeasures
  • Have deposits delivered to bank under dual control
  • If fraud suspected, verify deposit prior to dispatch without suspect’s knowledge; then contact bank to confirm that deposit was made
  • Have deposits made in night drop, verify at beginning of next day
  • Make sure deposits in transit are first items to clear on next statement
cash larceny controls
Cash Larceny Controls

Separate the following duties:

  • Cash receipts
  • Cash counts
  • Bank deposits
  • Deposit receipt reconciliation
  • Bank reconciliation
  • Posting deposits
  • Cash disbursements
cash larceny controls12
Cash Larceny Controls
  • Surprise cash counts
  • Review check and cash composition of daily bank deposit
  • Review timeliness of deposits from locations to central treasurer function
  • Observe cash receipting operations at all points of entry
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