Scribd
Upload
3K views10 pages

Teeming & Lading

Teeming and lading is a fraudulent accounting practice where a customer's payment is applied to another customer's account to conceal cash shortfalls. This is done by crediting the payment to a previous customer's account instead of the actual paying customer. It can also involve splitting cheque payments between customers. Auditors must carefully examine transactions and checks for signs of teeming and lading during the verification process.

Uploaded by

Sajib Chakraborty
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
3K views10 pages

Teeming & Lading

Teeming and lading is a fraudulent accounting practice where a customer's payment is applied to another customer's account to conceal cash shortfalls. This is done by crediting the payment to a previous customer's account instead of the actual paying customer. It can also involve splitting cheque payments between customers. Auditors must carefully examine transactions and checks for signs of teeming and lading during the verification process.

Uploaded by

Sajib Chakraborty
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
You are on page 1/ 10

Asif Mahbub Karim MBA,CA(Inter.), KPMG,MCFC,MBA,B.Com.,PGDIR Assistant Professor www.asifmkarim.webs.

com

Concept
Teeming and lading is a method or practice adopted in

accounting. It involves the allocation of one customer's payment to another in order to make the books balance and often in order to detract from a possible shortfall.
This process is often continued until it gets discovered. It is

also known as short banking or delayed accounting or lapping.

Cont
Another similar strategy is applied when remittances

are received by means of cheques, where cheques are split up to record payments. This is known as splitting cheques. Here by encashing the cheques, less amount is credited to the debtor and rest of the amount is misappropriated. Auditors pay special attentions during the vouching process as part of the verification of transaction to identify teeming and lading kind of accounting.

Cont
In point of fact it is a practice adopted by the

fraudulent rather than standard accounting. Many large defalcations arise from the smallest beginnings through 'teeming and lading'.

The Process of detecting


This is the method by which the deficiencies of cash

are concealed for sometime. When cash is received from some debtor, it is not recorded in the cash books and is misappropriate. Later on, when cash is received from any other debtor, his account is not credited but the account of the first debtor is credited and cash is debited, again later on, when cash is received from their debtor, his account is not credited but that of the second debtor in credited and cash is debited.

Cont
This process goes or the fraud is discovered. This

method of fraud is know as short banking or delayed accounting of money received or lapping. This is method by which the past defalcations are covered up by the present receipt. If remittances are received by means of cheques, then cheques will have to be split up. This proves is known as splitting cheques. Because by encashing the cheques, less amount id credited to the debtor and rest amount is misappropriated.

Cont
We can detect such frauds with the help of auditors.

The auditor should find out what is the internal check system regarding cash. If there is any weak point, he must probe into the matter. The cashier should not have access to ledger. Auditor should check the counterfoils of the receipts with the cash book paying particular attentions to the dates.

Cash Certificate
We the auditor of . Co Ltd. have counted the cash in

hand as at 8:30 am on 18th day of November at their Head/ branch office and found the followings:
Physically Found Tk.18500.00 Shortage/Excess Tk. 9000.00

Balance as per Cash Book Tk. 27500.00

The Custodian of cash could not provide satisfactory explanation

for the above. The cash been counted and returned intact to the custodian of cash. ---------Cashier

----------------------------- On Behalf of the Auditor

Audit Evidence
Audit evidence are the significant collection and

compilation of information that assists the auditor to justify and state an audit observation. Following are the auditors decision on evidence accumulation :
1. Which audit procedure to use. 2. What sample size to select for a given procedure.

3. Which items to select from the population.


4. When to perform the procedures.

Types of Audit Evidence


Following are the main ways to obtain audit evidence.
1. Physical examination. 2. Confirmation. 3. Documentation. 4. Observation. 5. Inquiries. 6. Reperformance. 7. Analytical Procedures.

You might also like