Deposit Verification
Definition
Audit procedure that traces cash receipts from the point of collection through to the bank deposit, confirming that the amounts recorded match the amounts deposited and that no delay in depositing created an opportunity for diversion.
- Domain
- Forensic accounting / fraud examination
- Traces
- Cash receipt to bank deposit
- Detects
- Skimming and delayed-deposit diversion
- Compares
- Recorded amounts vs. deposited amounts
Common questions
What red flag does deposit verification most commonly surface?+
A consistent lag between the date cash is recorded as received and the date it reaches the bank, or receipts recorded but never matched to any deposit slip, both of which point to funds being diverted before banking.
How does deposit verification differ from a bank reconciliation?+
A bank reconciliation checks that the company's cash ledger matches the bank statement balance; deposit verification goes a step further back, tracing each individual cash receipt from collection to confirm it was deposited in full and on time, which a reconciliation alone would not catch if receipts were skimmed before recording.
Related terms
- Cash Larceny
- Theft of cash already recorded in an organisation’s books. A shortage can appear when the recorded balance is compared with actual cash...
- 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,...
- Skimming
- Diversion of organisational cash receipts before they are recorded. Because the ledger may omit the transaction, investigators may compare independent sales, customer,...
- 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...