Roxanne, an employee in the bank's accounting department, debits the bank's general ledger and credits her own account. Which fraud scheme does this illustrate?

• A. False accounting entry
• B. Daisy chain
• C. Sham loan
• D. Unrecorded cash payment

Answer: (A)

False accounting entry is the technique at play here. By debiting the bank’s general ledger and crediting her own account, the employee is manipulating the records to hide a transfer of funds that didn’t genuinely occur. In double-entry bookkeeping, every transaction should reflect real cash movements with equal debits and credits; when the purpose is to siphon funds, the entry misstates the bank’s assets and creates the appearance of a legitimate transaction. This is a classic way to conceal embezzlement by altering the records rather than by a real, authorized payment.

Daisy chain would involve a sequence of payments across multiple accounts to obscure the trail, not a single false entry designed to cover theft. A sham loan would imply inventing a loan and related entries to move money, rather than a misleading ledger entry to divert funds. An unrecorded cash payment would mean a cash transaction occurred but wasn’t recorded, the opposite of falsifying a ledger to hide a misappropriation.