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Exam 3: Cash Larceny Schemes

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Question 1

True/False

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Skimming involves the theft of money that has already appeared on a victim's books, while cash larceny involves stealing money before it has been recorded.

A) True
B) False

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Question 2

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Deposit lapping is considered an off-book scheme.

A) True
B) False

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Question 3

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Methods for concealing larceny of receivables include which of the following?

Jeff Lewis is an accounts receivable clerk for FTB Industries. As customers pay off their balances, Lewis posts the payments but pockets the money. He can conceal his theft by:

To prevent cash larceny through falsification of cash counts, an independent employee should verify the cash count in each register or cash box at the end of each shift.

In one of the case studies in the textbook, Bill Gurado was a branch manager for a consumer-loan finance company in New Orleans who decided to help himself to the daily deposits. Instead of depositing the money into the company's bank account, he deposited the money into his own personal account. How was Gurado's fraud discovered?

Danielle Boyle, CFE, was hired to investigate some suspicious activity in the accounts receivable department at Red Technologies. While examining the company's accounting records, she noticed several payments posted to customers' accounts that were later reversed with journal entries to "courtesy discounts." What type of scheme might this situation indicate?

Mel Turner, the runner for a small bookstore, had a bad habit of helping himself to cash from the deposit on the way to the bank. He covered his tracks by substituting a check from the next day's deposit for the amount he stole from the previous day's deposit. This is an example of what type of concealment?

In one of the case studies in the textbook, Laura Grove was the head teller at a bank in Tennessee. As the head teller, she had the authority to open the night depository along with another teller. For security reasons, each teller only had half of the combination to the vault. In the end, Grove opened the vault and stole two deposit bags worth approximately $16,000. How was she ultimately caught?

The central weakness of a cash larceny scheme is the resulting imbalance in the organization's accounting records.

Jan Ashley worked for the R&S Department Store as a sales associate in the fine linens department. As she would give change back to a customer for cash sales, she would also pull out a $10 bill and slip it in her pocket. She concealed her scheme by issuing one false refund at the end of her shift for the total amount she stole that day. This is an example of what type of scheme?

Where do most larceny schemes involving cash occur?

Running a report that summarizes user access for the sales, accounts receivable, cash receipt, and general ledger systems during non-business hours might identify a cash larceny scheme.

According to the 2010 Report to the Nations on Occupational Fraud and Abuse, cash larceny schemes had the largest median loss of all cash misappropriations.

Which of the following methods can be used to conceal a larceny scheme that occurred at the point of sale?

Dorothy McNally stole $232 from the company deposit while on the way to the bank. She can conceal the theft by recording the missing amount on the bank reconciliation as a(n) :

According to the 2010 Report to the Nations on Occupational Fraud and Abuse, cash larceny schemes were the least common form of cash misappropriations.

Which of the following computer audit tests would be the least useful in detecting a cash larceny scheme?

What is the primary difference between cash larceny and skimming?

The most important factor in preventing cash larceny from the deposit is: