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.