Principles of Fraud Examination, 4th Edition

EXHIBIT 8-1

CHAPTER 8

REGISTER DISBURSEMENT SCHEMES

LEARNING OBJECTIVES

After studying this chapter, you should be able to:

8-1	Explain what constitutes a register disbursement scheme
8-2	Differentiate register disbursements from skimming and cash larceny schemes
8-3	List the two basic categories of register disbursements
8-4	Explain how false refund schemes are committed
8-5	Explain how false void schemes are committed
8-6	Understand how register disbursement schemes cause shrinkage
8-7	Discuss the methods by which fraudulent register disbursements are concealed
8-8	Understand the methods identified in this chapter for preventing and detecting register disbursement schemes
8-9	Be familiar with proactive audit tests that can be used to detect register disbursement schemes

CASE STUDY: DEMOTION SETS FRAUD IN MOTION¹

Following a demotion and consequent pay cut, Bob Walker silently vowed to even the score with his employer. In six months Walker racked up $10,000 in ill-gotten cash from his employer, who was caught completely off-guard, before someone blew the whistle.

The whistleblower was Emily Schlitz, who worked weekends as a backup bookkeeper at a unit of Thrifty PayLess, a chain of 1,000 discount drugstores crossing ten Western states.

One October, while reviewing her store's refund log, Schlitz noticed an unusually large number of protocol breaches by ...