Chapter 4: Cash Larceny

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Chapter 4 Cash Larceny
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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.

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What is Cash Larceny?

• Definition
• Intentional taking
• Of employers cash
• Without employers consent
• Cash includes currency and checks

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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

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Cash Larceny Schemes

• Theft of cash on hand
• From cash register or cash box
• Posted customer payments
• Theft from the deposit

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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

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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

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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

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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

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Cash Larceny - Countermeasures

• Have deposits delivered to bank under dual
  control
• If fraud suspected, verify deposit prior to
  dispatch without suspects 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

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Cash Larceny Controls

• Separate the following duties
• Cash receipts
• Cash counts
• Bank deposits
• Deposit receipt reconciliation
• Bank reconciliation
• Posting deposits
• Cash disbursements

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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