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Hi sir, for june 2010 question 3b, the deficiency regarding the
“cashier updating both the cash book and sales ledger” ,
In the answer key, it is stated that this is weak segregation of duties. But, would i will be penalised if i said this is lack of segregation of duties ?
Moreover, it states that it increases the risk of ‘teeming and lading ‘ fraud. I understand that teeming and lading is a book keeping fraud. But how would it happen ?
Is it by the cashier fradulently allocating one customer’s payment to another to balance the books, in order to hide a theft ?
Could you check if my understanding is correct sir.
? Lack of segregation of duties
If the cashier was handing the cash and cheques received, as well as recording the details in the books.? Weak segregation of duties
In this case, the cashier doesn’t handle the monies. He only does the recording of the details in the cash book and sales ledger.So there is actually segregation of duties, just that it is weak because seperate individuals are not updating the books respectively, instead the cashier updates both the books.
Is my understanding correct sir ?
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