Sometimes the totals of a wage bill are inflated by over totalling the column in which the wages payable are entered. Such a fraud can be detected only if the totals of the wage bill are checked. Similarly, a cashier may misappropriate receipts from customers by under-totalling the receipts column of the cash book. At times, shortages in cash have been also covered up by over totalling. Such frauds can be
detected only if the totals of the cash book and the general ledger are checked. On these considerations, where totals of the cash book or the ledger are found to have been made in pencil, the book keeper should be asked to ink the totals before their verification is commenced. This would deter him from altering the totals on the totaling mistakes being discovered.
Sometimes a fraud is committed in the following manner :
- undercasting the receipt side of the cash book;
- overcasting the payment side of the cash;
- fictitious entries being made in the cash column to show that amounts have been deposited in the account when, in fact, no deposit has been made;
- posting an amount of cash sale to the credit of a party and subsequently withdrawing the amount; and
- wrong totals or balances being carried forward in the cash book or in the ledger.
Students, it is expected, will be able to think several other devices where amounts can be
misappropriated either by making wrong entries or by failing to make an entry in the accounts.
