ICAEW ARF · Chapter 6 · Question 11 of 11
Which of the following controls is most likely to detect 'teeming and lading' by a receivables clerk?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) Customer statements are sent by someone independent of cash receipts and the receivables ledger, who also follows up customer queries
Explanation
Teeming and lading involves stealing a receipt from one customer and concealing it by allocating later receipts from other customers to that account. Customers whose payments have been delayed in being allocated may query their statements, and an independent person following up queries is likely to detect the fraud. Daily banking, casting the cash book and numbering invoices do not reveal misallocations.
More Controls over payroll, inventory and cash MCQs
- Q2Which control best reduces the risk of hourly paid staff being paid for hours they did not work?
- Q3Which control best ensures that PAYE income tax and National Insurance deducted from employees are correctly paid over to HM Revenue &…
- Q4Which of the following is a physical control over inventory?
- Q5During a year-end inventory count, count sheets are sequentially numbered, issued to count teams and accounted for at the end of the…
- Q6A client uses a perpetual inventory system with continuous counting instead of a full year-end count. Which of the following would be…