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Chapter 4: Cash Larceny

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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Chapter 4: Cash Larceny

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  1. Chapter 4: Cash Larceny

  2. 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.

  3. What is Cash Larceny? • Definition: • Intentional taking • Of employer’s cash • Without employer’s consent • “Cash” includes currency and checks

  4. 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

  5. Cash Larceny Schemes • Theft of cash on hand • From cash register or cash box • Posted customer payments • Theft from the deposit

  6. 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

  7. 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

  8. 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”

  9. 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

  10. 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

  11. Cash Larceny Controls Separate the following duties: • Cash receipts • Cash counts • Bank deposits • Deposit receipt reconciliation • Bank reconciliation • Posting deposits • Cash disbursements

  12. 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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