Which statements are true regarding detecting a cash larceny scheme?

• A. Reconciling the cash register total to the amount of cash in the drawer is helpful
• B. Someone other than the accounts receivable clerk should prepare the bank deposit
• C. If employees who handle cash go on vacation, other employees should take over their duties
• D. All of the above

Answer: (D)

Detecting cash larceny relies on strong cash-handling controls that create checks and balances. Reconciling the cash register total to the cash in the drawer provides a direct comparison that can reveal discrepancies, pointing to misappropriation or errors when the numbers don’t match. Having a person other than the accounts receivable clerk prepare the bank deposit introduces independence in the process, making it harder for one employee to skim cash without observation and making discrepancies easier to spot during reconciliation. When cash-handling staff go on vacation, others should take over their duties to maintain ongoing monitoring and separation of duties, preventing the opportunity for one person to conceal theft over an extended period. Taken together, these controls support detection and deterrence of cash larceny, so all of the above statements describe valid practices.