I read with interest “ Control Cash-Register Thievery ” ( JofA, Jun.02, page 88), but the following made me scratch my head:
“Each evening, just before closing all eight registers, someone would ring up a several-hundred-dollar refund on one, remove an equal amount of cash and close out the register for the day. The amounts ranged from $200 to $700.” The article also said: “Of the $800,000 stolen in three years….”
If $800,000 were stolen in three years and the store was open 365 days a year, the average amount stolen would be $731 per day—yet the article told us that $200 to $700 was removed from one register each day.
I also noted other unusual items in the article such as the ratio of credit card receipts to cash that, if correct, would indicate the reported sales of the store averaged $550,000 per year and reflected at least $267,000 a year of credit memos. Forget tracking credit memos—if the sales were $817,000 and only $550,000 was reported, then the gross profit percentage would be an immediate clue to everyone, especially if there were 13 other stores.
Further, the article pointed out the author reconciled the $800,000 fraud and that the insurance deductible was $500,000. I’m guessing the insurer reimbursed the discounted retail chain $300,000, but the author waived his fee because he felt his work was inadequate.
I’m sure all this can be explained, but I believe this succinct presentation could leave readers guessing. My point is that summarizing a fraud investigation, which generally is very detailed and laborious, needs to be extremely accurate or it’s possible the work can lose its credibility.
Charles (Chuck) T. VanBelle Jr., CPA
Author’s reply: The sentence in question should have read: “Each evening, just before closing all eight registers, someone would ring up a several-hundred-dollar refund on one or more, remove an equal amount of cash and close out the register for the day.”
Joseph T. Wells, CFE, CPA