Cash Larceny
Definition
Taking cash that has already been recorded in the accounting system. The record exists, so the theft creates a provable discrepancy between the book entry and the physical cash, making detection more straightforward than skimming.
- Field
- Occupational fraud and asset misappropriation
- Key feature
- Cash already recorded before theft
- Contrast
- Skimming steals cash before it is recorded
- Detection signal
- Discrepancy between book and physical cash
Common questions
Why is cash larceny generally easier to detect than skimming?+
Because the cash was already entered into the books before it was stolen, a physical cash count or register reconciliation against recorded receipts will surface a shortage, whereas skimmed cash never enters the records so there is no book figure to compare against.
What controls specifically target cash larceny?+
Segregation of duties between the person handling cash and the person recording it, mandatory daily reconciliation of register tapes or receipts against deposits, and surprise cash counts are standard controls aimed at this scheme.
Can cash larceny occur outside a retail register setting?+
Yes, it can occur anywhere recorded cash is later physically removed, such as from a petty cash fund, a bank deposit bag before it reaches the bank, or receivables payments taken after posting to the accounts.
Related terms
- Skimming
- An off-book cash theft: revenue is stolen before it enters the accounting system, so no entry is ever made. Skimming is harder...
- Deposit Verification
- Audit procedure that traces cash receipts from the point of collection through to the bank deposit, confirming that the amounts recorded match...
- Fraudulent Disbursement
- A scheme in which the perpetrator manipulates the organisation's outbound payment process to divert money to themselves or an accomplice. The main...
- Ghost Employee
- A fictitious or terminated worker whose record remains active on the payroll master file. Wages are disbursed under that record and diverted...
- Lapping
- A scheme to conceal the theft of cash from customer receipts by applying a later customer's payment to the earlier customer's account....
- Off-Book Scheme
- Any fraud in which transactions are never entered into the accounting records. Off-book schemes are the hardest to detect by accounting review...
- Register Reconciliation
- The process of comparing point-of-sale transaction records against physical cash drawer counts for the same period. Persistent shortages on specific shifts, registers,...
- Segregation of Duties
- The principle that the authorisation, custody, and recording of any transaction should be performed by different people. Its absence is the single...
- Surprise Cash Count
- An unannounced physical count of cash on hand at a specific location, compared against the accounting balance at the same moment. Persistently...
Explained in these topics
- Asset Misappropriation and Skimming
- Cash Theft and Skimming SchemesTheft of cash after it has been recorded in the accounting system. The books show the receipt; the bank deposit is short. The gap appears as a reconciling diff...