Week 2 Solutions - Week 2 Solutions Exercise 5-5 Question:...

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Week 2 Solutions Exercise 5-5 Question : Define these terms: skimming, kiting, lapping, kickbacks Solution : a. Skimming involves converting business receipts to one's personal use and benefit, by such techniques as cash register thefts and swapping checks for cash. b. Kiting involves building up balances in bank accounts based upon floating checks drawn against similar accounts in other banks. c. Lapping involves recording of payment on a customer's account some time after the receipt of the payment. d. Kickbacks involve a vendor/supplier and an employee which involves sale of unreported inventory or payment of an inflated price. Exercise 5-18 Question: What are some audit steps to catch skimming and money-laundering schemes? Solution : Gross profit analysis, compare receipts with deposits, surprise cash count, and investigate customer complaints. Exercise 5-29 Question: List the things that should not be done in a fraud investigation. Solution: a. Limit the scope. b. Challenge the suspects. c. Make emotional or hasty decisions. d. Deface or damage any evidence.
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Week 2 Solutions - Week 2 Solutions Exercise 5-5 Question:...

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