A common scheme to conceal the misappropriation of cash receipts ________.
A)is known as lapping
B)is known as kiting
C)is usually committed by senior management and members of the board of directors
D)should be handled by the internal audit function, not the external auditors

Question

Quizplus · Accepted Answer

Lapping is a common scheme to conceal the misappropriation of cash receipts. It involves using subsequent receipts from other customers to cover up the theft of an initial customer's payment. Option B refers to a different scheme of fraud where checks are written from one bank account to another bank account without sufficient funds to cover the checks. Option C is not necessarily true as misappropriation can also be committed by lower-level employees. Option D is incorrect as both internal and external auditors can have a role in detecting and preventing fraud.

A Common Scheme to Conceal the Misappropriation of Cash Receipts