An investigation into various frauds

Cash receipts 

  • Nature of duties of a person who is expected to have committed fraud. 
  • Examine the line of responsibility among the various members of the staff. 
  • Income received from different sources should be scrutinized. 
  • Carbon copies of receipts marked duplicate should be scrutinized. 
  • Examining the record of the small or negligible sources of income such as sales of scrap for the sale of waste paper. 
  • Review of recoveries from customers and secondary parties along with deductions on account of cash discount. 
  • Examine the receipts are serially numbered and all receipts have been accounted for. 
  • In case of canceled receipts, its original copy should be examined and verified. 
  • Inquiries should be made for an unreasonable cash discount. 

Cash payments 

  • Ensure that all payments are properly authorized by the competent authority. 
  • Acknowledgment by parties for payments has to be carefully scrutinized and extra care is required where a figure appears to have been erased or altered on such acknowledgment. 
  • Payment by bearer cheques required careful examination. 
  • Payments as regard wages should be examined for possible over-saling of wage sheets and entries regarding dummy workmen. 
  • Payment for goods purchased should be reviewed so as to confirm that no payment has been made in respect of supplies that have not been received. 
  • Any amount paid to partners/directors should be specifically enquired due to the possibility of manipulations therein. 
  • Any outgo as regards salaries and wages from petty cash books should be followed up and the petty cash book itself should be watched and totaled. 

Customers’ ledger 

  • Trace the entries in the order book with the corresponding record in the sales day book.
  • Examine customer accounts to ensure that they have been properly debited at the appropriate amount.
  • The amounts are written off as bad that should be carefully examined. 
  • Any unusual discount given to them should be thoroughly enquired into and written representation should be obtained from the appropriate authority in this connection. 
  • Attention should be given to the teeming and lading frauds in such accounts. 
  • Balance confirmation from customers should be obtained.

Suppliers’ ledger 

  • The Bought journal should be vouched by reference to the goods inward book. 
  • The amount has been correctly credited in respect of goods duly received or not. 
  • Request the supplier to furnish statements of their accounts to find out whether or not any balance is outstanding or due. 
  • Confirm that allowances and rebates given by them are correctly adjusted.
  • Stock defalcation 
  • Physically check the quantities in stock and those shown by the stock book. 
  • Cross-checking of good inward and outward registers along with the purchase and sales day book. 
  • Use of expert advice wherever required.

304 North Cardinal St.
Dorchester Center, MA 02124

Work Hours
Monday to Friday: 7AM - 7PM
Weekend: 10AM - 5PM