What can make it easy for an employee to skim sales or receivables?
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A. B. C. D.B
Skimming refers to the act of stealing cash receipts that are not recorded in a company's books, which can be difficult to detect because the transactions are not recorded. Skimming can be done by an employee in a position to receive cash payments, such as a cashier or salesperson.
Out of the four options provided, the most likely factor that can make it easy for an employee to skim sales or receivables is option B, "Poor collection and recording procedures." Here is a detailed explanation for why each option is or is not likely to make it easy for an employee to skim sales or receivables:
A. Revenue sources and recording procedures: This option is partially correct, as revenue sources and recording procedures can play a role in making it easy for an employee to skim sales or receivables. For example, if a company has multiple revenue streams, it may be more difficult to keep track of all the cash receipts, making it easier for an employee to skim. However, this option is not the best answer because it doesn't address the issue of how an employee can skim sales or receivables. It only touches upon factors that may make it more difficult to detect skimming.
B. Poor collection and recording procedures: This option is the most likely to make it easy for an employee to skim sales or receivables. Poor collection and recording procedures can create opportunities for employees to steal cash receipts without being detected. For example, if a company has weak internal controls over cash handling and recording, such as lack of segregation of duties or inadequate supervision, an employee may be able to take cash without anyone noticing. Additionally, if a company has a manual accounting system or outdated technology, it may be easier for an employee to alter or manipulate records to cover up the theft.
C. Internal audits and recording procedures: This option is incorrect because internal audits and recording procedures are designed to detect and prevent fraud, including skimming. If a company has effective internal controls, such as regular audits and checks and balances, it will be more difficult for an employee to skim sales or receivables. Therefore, this option does not make it easy for an employee to skim sales or receivables.
D. Register manipulations and recording procedures: This option is partially correct because register manipulations and recording procedures can create opportunities for employees to steal cash receipts. For example, an employee could manipulate the cash register to underreport sales or void transactions and pocket the difference. However, like option A, it does not address the issue of how an employee can skim sales or receivables. It only touches upon factors that may make it more difficult to detect skimming.
In summary, the most likely factor that can make it easy for an employee to skim sales or receivables is poor collection and recording procedures. These can include inadequate internal controls, outdated technology, and weak supervision, among other things. Effective internal controls, including regular audits and checks and balances, can make it more difficult for an employee to skim sales or receivables.