What Are Types Of Commercial Frauds And What Is Misappropriation Of Cash?


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The frauds connected with accounts may be divided into the three types; misappropriation of cash, misappropriation of goods and manipulation. Cash misappropriate by dishonest employees is concealed either by omitting to enter receipts or by entering fictitious payments. Omission of sales and the misappropriation of cash received from customers. A number of cash sales may not be recorded in books and the corresponding cash may not be misappropriated.

Vouchers once approved and paid may be in support of further reimbursement. False credits passed in a customer's account in respect of discount, returns, allowance, or corresponding cash receipt. Misappropriate of the proceeds of bills discounted, the bills being shown as in hand. Theft of unusual receipts of cash for example sale of waste, recovery of bad debts, written off in past etc.

Misappropriate of cash received on account of goods sent on sale or return or under VPP system, the goods being shown as having been returned. Recording fictitious purchases and expenses for the purpose of misappropriating the corresponding cash payment. Suppression of credit noted for the purchases returned to creditors or allowance obtained from them with a view to pocketing the amount of cash payment

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