08_ACTIVITY_01

CASE 1:

Required: In no more than five (5) sentences, discuss what type of embezzlement scheme is being
depicted and how it operates.

In my opinion the type embezzlement that arises should be lapping, from which is a common
embezzlement or a fraud by lower-level employees in positions that handle cash receipts. It is a kind of
scheme where cash receipts are stolen from an organization after they have been recorded in the
books. Lapping scheme started from which the teller steals cash, such as payment of loan of the
customer A. To conceal the fraud of imbalance credit of asset, the teller should the check or the
payment received by customer B to applies it to Customer A account. Then, funds/ payment received
made by customer C applied to customer B so on.

CASE 2:

Required: In no more than five (5) sentences, discuss what type of embezzlement scheme is being
depicted and how it operates.

WEAKNESSES RECOMMENDATIONS

There are no supporting documents attached to In order to verify that the payments are valid and
the checks and payment listings when they are existed, checks sent to the treasurer for signature
forwarded to the treasurer for payment. and verification should be accompanied using
supporting documents like invoices, purchase
order slip and receiving reports.

The supporting documents received are not
cancelled yet first after the payment was made, so
that there is a possibility of a second payment of
the same invoice.
The company should monitor and check all the
supporting documents regularly, to trace and
segregate those supporting documents that
already paid to not already paid. This could be a
prevention to avoid second payment of the same
invoices.

Invoices are paid without proper agreement to
purchase orders and receiving reports. Making
payments without this comparison could result in
payments for goods that were not ordered/listed or
that were not received.
Company should require a proper authorizations
and verification documentation as a proof for the
payment. Those supporting documents for
verification should be invoices, purchase order
and receiving reports.