Home > Kiting, Explained (audit of cash) > Kiting, Explained (audit of cash)

Kiting, Explained (audit of cash)

KITING

Ang kiting ay isang paraan ng misappropriation ng asset (particularly cash)  na ginagawa ng mga empleyado. Dito, sinasamantala ng mga gumagawa ng kiting ang clearing time ng cheke sa banko. Pano nangyayari ang Kiting?

Example:

A Company has several Bank accounts

Si bookkeeper nagsulat ng cheke sa pangalan nya worth P20,000 from Bank Account A of the company. Syempre no journal entry was made.

Nagastos lahat ni bookkeeper yung pera.

December 31 na at short parin yung cash ng P20,000 dahil kinuha nga nya. Fearing that the auditors will detect this fraud, ginawa nya ganito:

1. Nagsulat sya ng check worth P20,000 from Bank Account B at dineposit nya sa Bank Account A (still, no entries made).

2. Since pag deposito nya sa Bank Account A ay maccredit agad ito at ang Bank Account B naman ay hindi agad mababawasan kasi nga icclear pa yung check. So it will appear that Bank Account A has no shortage and at the same time Bank Account B is at its correct balance until the check clears (syempre hindi mag-eentry hangga’t di nagcclear ang checks kasi considered as cash parin natin un diba). So, sinamantala ng employee yung clearing time ng check para maconceal ung fraud at yearend.

Paano madedetect ang Kiting?? Auditors do a so-called BANK TRANSFER SCHEDULE to detect kiting. This schedule shows the dates of transfer among the client’s various bank accounts. Itong schedule na ito ay designed talaga to detect kiting kaya ang covered period nito ay before and after year-end. Ang data ay nanggagaling sa Cash Receipts and Cash Disbursement Journals.

Dun sa case na binigay ko, eto ang lalabas sa Bank Transfer Sched

Pano ngayon yan? Unang titignan ng auditor dyan yung Bank Dating, kung kelan nangyariang mga transfers amoong banks. Kung papansinin nyo ung dating ng Bank Acct A ay Dec. 31 palang nacredit na pero sa Bank Account B, January pa nadebit yung account. Pag magkaiba ang dating period ng Bank Transactions, dyan na papasok ang professional skepticism ng auditor. Iiispin nya ngayon, maaring nadouble count yung cash kasi nacredit na sa A pero di pa nadedebit sa B yung cash so parang lumalabas, sumobra ng P20,000 yung cash per bank statement ng company.

So anong ginawa ng lokong empleyado para talagang maconceal yung cash shortage at year end? Hindi sya magrerecord ng Cash Disbursement sa  side Bank Account B at  Dec. 31 kasi di pa nagcclear at  sasadyain ng empleyado na hindi isama yung particular na cheke na yan sa listahan ng Outstanding Checks. Theoretically dapat Bank Reconciling item sya at idededuct sa unadjusted Bank B balance as Outstanding check. Since hindi sya dineduct as outsanding check, dun palang, concealment na yun. Idagdag mo pa yung hindi nirecord sa side naman ni Bank B yung cash na nacredit sa bank noong december 31. So lumalabas:

– Sobra ka ng 20,000 sa Balance Per Bank, Adjusted sa Bank B kasi dapat Outstanding check yun kaso hindi inaccount for. Sabay nagrecord pa nya yung cheke sa books ng January 2 next year, so parang lumalabas, disbursement na to noong following year.

– sa part naman ni Bank A, hindi nya nirecord ung bank credit (yung transfer from B) noong december 31. Since ORIGINALLY kulang nga si bank A ng P20,000, yung bank credit na yun ngayon ang magcocover sa butas na yun as of the moment na di pa sya nagrerecord transfer ng 20,000 at December 31. Kung di nyo mavisualize, eto yung visual explanation nya:

So through the Bank Transfer Schedule, makikita ang mga details at ma-uunearth ang mga concealment na ito.

Clear po?

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  1. November 15, 2010 at 6:20 pm

    Thank you sir JE for further explaining this topic. It is easy to understand. Salamat po. HIndi ko po kayo minsan naaabutan sa pcpa. 🙂

  2. November 19, 2010 at 3:12 pm

    ang galing kuya ah .. pano naman po ung lapping?

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