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Chapter 9 Non-Cash Assets.

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Presentation on theme: "Chapter 9 Non-Cash Assets."— Presentation transcript:

1 Chapter 9 Non-Cash Assets

2 Inventory and All Other Assets Misuse Larceny Asset Req. & Transfers
False Sales & Shipping Purchasing & Receiving Unconcealed Larceny

3 Non-Cash Misappropriations
Misuse Unconcealed larceny Asset requisitions and transfers Purchasing and receiving schemes Fraudulent shipments

4 Misuse of Non-Cash Assets
Typical misuse Doing personal work on company time Running side businesses

5 The Costs of Inventory Misuse
productivity additional employees Lost business wear and tear

6 Unconcealed Larceny Schemes
not complex Some employees know their co-workers are stealing highly trusted Assets misappropriated after-hours or mail to themselves

7 The Fake Sale accomplice
Sale is not rung up but the accomplice takes the merchandise return merchandise for cash

8 Preventing and Detecting Larceny of Non-Cash Assets
Segregate the duties Maintain physical security access logs Install security cameras

9 Preventing and Detecting Larceny of Non-Cash Assets
inventory counts Investigate significant discrepancies customer complaints

10 Asset Requisitions and Transfers
non-cash assets to be moved from one location to another Internal documents are used requisition materials to complete a work-related project but steals the materials multiple locations

11 Purchasing and Receiving Schemes
Assets were intentionally purchased by the company but misappropriated Falsifying incoming shipments

12 False Shipments of Inventory and Other Assets
False shipping documents and false sales documents False packing slips false sale is created Receivable is aged and written off Legitimate sale is understated

13 Other Schemes Assets are written off Assets are declared as scrap
New equipment is ordered for the company to replace old

14 Concealing Inventory Shrinkage
What is Inventory Shrinkage? What detects Inventory Shrinkage?

15 Concealing Inventory Shrinkage
Altered inventory records Fictitious sales and accounts receivable

16 Concealing Inventory Shrinkage
Write off inventory and other assets Physical padding

17 Preventing and Detecting Non-Cash Thefts Concealed by Fraudulent Support
Segregation of Duties Match the invoices to receiving reports before payments are issued Match the packing slip to an approved purchase order

18 Preventing and Detecting Non-Cash Thefts Concealed by Fraudulent Support
Match outgoing shipments to the sales order before the merchandise goes out Periodically match inventory shipments to sales records Investigate shipments that cannot be traced to a sale Check out unexplained increases in bad debt expense

19 Preventing and Detecting Non-Cash Thefts Concealed by Fraudulent Support
Compare shipping addresses to employee addresses Review unexplained entries in perpetual inventory records Reconcile materials ordered for specific projects with actual work done Perform trend analysis on scrap inventory Check to make sure that inventory removed from inventory is properly approved

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