Fraud Examination Casebook with Documents

CHAPTER 2Case 2: Check Fraud, Debit Card Fraud, Cash Larceny

2-1 ANDERSON INTERNAL MEDICINE: PREPARING A BANK RECONCILIATION AND SPREADING/ANALYZING TRANSACTIONS ON MONTHLY STATEMENTS FROM FINANCIAL INSTITUTIONS

Learning Objective

After completing and discussing this case, you should be able to:

1. Prepare a bank reconciliation between the bank records and company's accounting records to determine the existence of unaccounted transactions that have not been recorded in the:
   • Bank statements (but have been recorded in the company's point‐of‐sale [POS] computer program), deposits in transit (i.e., deposits recorded on the company's books but not presented to the bank), and outstanding checks (i.e., checks recorded on the company's books but not presented to the bank); and/or,
   • Company's accounting records (but may have been recorded in the bank statements), including unrecorded fees (e.g., insufficient funds charges, monthly account fees, and other debit memorandums) and unrecorded income (e.g., interest earned and other credit memorandums).
2. Enter into a spreadsheet debits and credits from financial institution monthly statements, identify the payee, maker, and endorsee on checks, read the transaction information on the back of checks, read the coding associated with debit (or ATM) card charges listed on the statements, read deposit slips, and then analyze the information.
3. Vouch transactions on the monthly statements to accounting records (e.g., cash receipts and cash disbursement ...