Skimming
Definition
An off-book cash theft: revenue is stolen before it enters the accounting system, so no entry is ever made. Skimming is harder to detect because there is no accounting discrepancy to find; detection usually relies on physical controls, surveillance, or tip-offs rather than records review.
- Definition
- Cash theft before accounting entry occurs
- Detection gap
- No direct accounting discrepancy to trigger normal controls
- Evidence source
- External records like customer receipts and till surveillance
Common questions
What makes skimming hard to catch in accounting?+
Skimming removes cash before it ever enters the books, so there's no accounting mismatch to trigger controls. Traditional account-matching systems can't detect what was never recorded. Detection depends on external evidence like customer receipts or till recordings showing a transaction that the company records never capture.
How is skimming different from other cash theft?+
Skimming intercepts cash before accounting entry, while other cash thefts might steal from a recorded account (creating a discrepancy). Because the skimmed revenue never reaches the records, it leaves no direct accounting gap. The thief's skill is staying invisible to the ledger.
What evidence actually catches a skimmer?+
Customer receipts, till surveillance footage, and revenue pattern analysis. If a till shows more transactions or payments than the company's records, or if customer receipts don't match recorded sales, the scheme unravels. External data sources that the thief didn't control become the proof.
Related terms
- Asset Misappropriation
- The largest Fraud Tree branch, covering schemes in which an employee steals or misuses the organisation's assets. Subcategories include cash schemes (skimming,...
- Cash Larceny
- Taking cash that has already been recorded in the accounting system. The record exists, so the theft creates a provable discrepancy between...
- Corruption
- Schemes in which an employee misuses their position to gain a direct or indirect benefit, typically involving a third party. The four...
- Financial-Statement Fraud
- Intentional misstatement or omission in financial reports to deceive users of those reports, typically to inflate earnings, understate liabilities, or maintain a...
- 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....
- Median Loss
- The loss figure at the midpoint of the distribution of cases, used in the ACFE's data because it is more representative of...
- Occupational Fraud
- The ACFE defines occupational fraud as the use of one's occupation for personal enrichment through the deliberate misuse or misapplication of the...
- Occupational Fraud Tree
- The ACFE's hierarchical classification of occupational fraud schemes, with three top-level branches (asset misappropriation, corruption, financial-statement fraud) subdividing into dozens of named...
- 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...
Explained in these topics
- The ACFE Fraud Tree and Occupational Fraud ClassificationAn off-book cash theft: revenue is stolen before it enters the accounting system, so no entry is ever made. Skimming is harder to detect because there is no ac...
- The ACFE Occupational Fraud TaxonomyA cash theft scheme in which revenue is stolen before it is recorded in the organisation's books. Because no accounting entry exists, traditional account-match...
- Asset Misappropriation and SkimmingTaking cash or other payments before they are entered into the accounting records. Leaves no direct accounting discrepancy, making detection dependent on exter...
- Cash Theft and Skimming SchemesTheft of cash before it is entered into the accounting system. No accounting entry exists for the stolen amount, making the scheme invisible to standard reconc...