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true or fale:Forced vacations is the only control procedure that can be used to help prevent or detect lapping.

User Kex
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1 Answer

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Final answer:

Forced vacations are not the only control procedure to prevent or detect lapping; other methods include segregation of duties, independent reconciliations, audits, the use of serially numbered documents, and strong access controls.

Step-by-step explanation:

False, forced vacations are not the only control procedure that can be used to help prevent or detect lapping. Lapping is a fraudulent activity which involves the manipulation of accounts receivable to hide stolen cash. Besides forced vacations, there are several other control procedures to prevent lapping:

  • Segregation of duties - Ensuring no single employee is responsible for both recording and processing a transaction.
  • Independent reconciliations - Having someone other than the custodian of receipts reconcile the bank statements.
  • Regular and surprise audits - These can uncover discrepancies in accounts receivable.
  • Use of serially numbered documents - Helps track all transactions and prevents tampering.
  • Strong access controls and authorization requirements - To prevent unauthorized access to financial records.

Implementing a combination of these controls increase the likelihood of either preventing the lapping scheme or detecting it early.

User Whatnick
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