Often we know the meaning of fraud in an audit with the word FRAUD, but fraud in the financial world can be interpreted as forms of theft such as in 362 article KUHP, extortion and threats in 368 article KUHP, embezzlement in 372 article KUHP, and skullduggery in 378 article KUHP. In general, the scams have also been defined by Webster's New World Dictionary as a fraud committed for personal gain.
Commonly known fraud in an audit in the form of LAPPING and KITTING. Know the difference between the lapping and kitting, to the two it is a form of cheating are often found on examination of auditors' client cash balances. Actually, not only like that, SKIMMING. Is a form of cheating before heading bookkeeping made. But in this case, we will discuss about the accident lapping and kitting and how to overcome them and their examples.
LAPPING, in definition
Is cheating by using accounts receivable have been paid and will be closed with unpaid receivables next and so on. Moreover, it can be a way of skimming money by way of cash-retreat delay the recording of cash receipts in both the near-term and longer periods of time.
KITTING, in definition
Is cheating by using bank checks in different service areas as an aid to make a cash balance or money freely. With the withdrawal of funds in one bank, which will be deposited in another bank. And will be withdrawn and will be recorded in the Bank's third and so on. In addition kitting form can be done with the window dressing that makes the treasury at the Bank is better than ever.
Presumably the above definition because it can not be completely understood by the following examples lapping and kitting for a complete understanding.
LAPPING example
Galih stole cash used by Customer A to pay the loan, the funds received from Customer B was used to pay the balance of receivables owned by the Customer A and so on, this can be likened to digging a hole and cover the hole.
KITTING example
Ariza cover the theft by creating cash by wire transfer of money between banks (interbank transfer). Ariza makes money by depositing checks from bank A to bank B and pull their money. Because Bank A, funds not enough, then Ariza deposit a check from Bank C to Bank A to Bank B before the check cleared. Thus the pattern continues with the checks and deposits as many times as necessary to keep the check could not be rejected. So that auditors can overcome the lapping and kitting there was made a test to detect lapping and kitting. After each test question.
So that auditors can overcome the lapping and kitting there was made a test to detect lapping and kitting. After each test question.
LAPPING solution
1. Confirmation of accounts receivable. Just as is done in the audit of accounts receivable, the auditor should consider the amount of deposits that contain a large number of doubts.
2. Doing the calculation of cash suddenly. The calculation of the amount of money in the company should be done suddenly, with the intention that lapper can not prepare for the possibility of fraud known to the auditor. Given the element of surprise, deception posed insurmountable.
3. Perform daily cash receipts journal comparisons with corresponding daily deposit slip details.
KITTING solution
1. Making the cutoff bank statement, will be seen from this list does not match the checks cleared the list of outstanding checks.
2. Creating a test cutoff, from this list will be known before spending the last balance sheet date will not be recorded in the check register.
