Question

What are noncash assets? How do fraudsters misappropriate noncash assets? What techniques can forensic accountants use to identify noncash assets misappropriation? For the toolbar, press ALT+F10 (PC) or ALT+FN+F10 (Mac). TTT Arial 3(12pt) TEE S Qix

Answer 1

Non Cash Assets are assets that aren’t in the form of cash.These are assets that cannot easily be converted into cash, for example:

• house and the land it's on
• personal effects (eg bed, couch, fridge)
• the vehicle that use for day-to-day transport (eg, car)
• a caravan, boat or other vehicle that is used by you, or a member of your family, for day-to-day accommodation
• a bank overdraft
• funds held or other retirement scheme accounts
• Maori land where the title is in tribal trust and individual ownership can't be identified.

Fraudsters misappropriation of non cash assets:

When the cash is stolen from the deposit, the receipted deposit slip is out of balance with the company,s copy of the deposit slip( unless the proprietor also prepared the deposit).To correct this problem , some fraudsters alter the bank copy of the deposit slip after it has beeb validated.This brings two copies back into balance.For example,an employee altered twenty four deposit slips and validated bank receipts in the course of a year to conceat the theft of over $15000 . These documents were altered, with correction fluid or ballpoint pen, to match the company's cash reports .Of course , cash having been stolen , the company's book balance does not match its actual bank balance. if another employee regularly balances the checking account, this type of theift should be eaisly detected.

Techniques of forensk accountants use to identify noncash misappropriation are as below:

a. Identify delivery of inventory to employee address by joining employee address to shipment address file.Inventory may be shipped directly to an employee address.

b. Identify delivery of inventory to address thet is not designated as a business address.

c. List top 100 employees by doller size ( one for inventory adjustments ,assets transfers, and accounts receivable write off). Employee with high adjustments may signal actions to hide inventory larceny schemes.

d.Inventory actual to standard price.Inventory prices may be adjusted in an attempt to conceal inventory larceny schemes.

e. Compute standard deviation for each employee for the last 3 months and list those employees who provided three times the standard deviation in the current month ( one for inventory adjistments, assets transfers and account receivable write off)