Page 1 |
Previous | 1 of 2 | Next |
|
This page
All
Subset
|
Bulletin HASKINS & SELLS 93 Apparent Cash Shortages THE danger of jumping at conclusions is one to be guarded against in cases where accountants suspect a cash irregularity. The accountant must be certain that there is a shortage and who is chargeable before going to the client with open accusations of a particular employe, who may be a trusted person. The client probably will regard with extreme disfavor any accusation not supported by absolute proof. Of course, it is permissible to inform the client that one's suspicions have been aroused, but even this must not be done too quickly and must be done tactfully. The following case of an apparent cash shortage is illustrative. During the audit of a certain construction company irregularities were brought to light which, at first, led the auditors to believe that a misappropriation of company funds had been effected, but later proved to be merely bona fide disbursements of the company's funds for purposes which they wished to conceal. The amount of these apparent irregularities was $1,337.50. Deposits of $1,337.50 appeared on the bank statement, but were not entered on the company's books. The deposits appearing on the bank statement were offset by debits appearing on that statement aggregating the same amount, for which no canceled checks were available and for which no entries appeared on the books. These amounts, representing collections from a customer, were deposited properly and offset by checks drawn in the usual manner payable to officials of the customer for whom work was being done. These amounts were paid to the customer's engineer in consideration of his furnishing inflated estimates of work performed. The disbursements were for the company's account and did not represent improper withdrawals in so far as employes were concerned. The collection and disbursement mentioned above were not recorded as it was not desired to have disbursements of this nature shown on the company's books. This appeared to have represented the plan of concealment of the company's accountant. In order to give proper credit to the customer from whom the amounts were collected, charges were made to the company's contract cost or to expense accounts in amounts aggregating $1,137.50 and credited to the customer. Entry for the other $200 was not made, apparently through oversight. These items were detected by comparing the deposits shown on the bank statement with the cash book, as well as comparing the canceled checks with the charges on the
Object Description
Title |
Apparent cash shortages |
Author |
Anonymous |
Subject |
Fraud |
Citation |
Haskins & Sells Bulletin, Vol. 11, no. 12 (1928 December), p. 93-94 |
Date-Issued | 1928 |
Source | Originally published by: Haskins & Sells |
Type | Text |
Collection | Deloitte Digital Collection |
Digital Publisher | University of Mississippi Libraries. Accounting Collection |
Date-Digitally Created | 2009 |
Identifier | HS Bulletin 11-p93 |