lapping in auditing


lapping in auditing

Lapping in the auditing profession


    Contrasting the receipts of the newspaper with the amounts deposited in the bank account reveals a type of fraud that is associated with the delay in the account of the funds received until the deposit of the deficit or withdrawal amount. This type of fraud, which is carried out through the transfer of cash from account to account, involves concealing fund deficits or unauthorized withdrawals by delaying the registration of received funds in the accounts of individuals.

    For example, in the first stage, the cashier withdraws the funds received from customer "A" without recording it in the account and waits for customer "B" to pay his debt. At this stage, he records a collection from the customer of "B" in the creditor of the account of "A". In this way, the account of customer "B" does not show a payment until it is received from another customer. By doing this type of fraud, accounts receivable are shown more than they should be.

    Where the person responsible for receiving cash from customers is also responsible for registering their accounts, cap to cap is easily done. In order to prevent the misuse of hard cash, the best solution is to ask the company's customers to deposit their payments directly into the company's checking account with the bank. In this way, no employee in the company can take the funds paid by customers.#lapping#auditing#accounting#finance#investment