Final answer:
To prevent lapping, businesses should implement strong internal controls such as segregation of duties, perform regular reconciliations, conduct surprise audits, and use automated systems to ensure transparency in their financial transactions.
Step-by-step explanation:
The question you've asked pertains to accounts receivable (AR) management within a business context. Lapping is a fraudulent accounting practice where an employee steals money from a company and covers it up by using payments from one client to offset receivables from another. To prevent lapping, businesses can adopt a few key practices. One of the best protections against lapping is to implement internal controls.
This includes segregation of duties, which ensures that no single employee is responsible for the recording, custody, and authorization of financial transactions. Regular reconciliation of accounts by an employee not involved with AR processing, surprise audits, and the use of automated systems that provide clear audit trails for transactions are also useful in preventing lapping. Management should encourage a culture of ethical behavior and consider instituting a whistleblower policy.