y-off balance to sell the car, he learned that the payment had not been credited to the loan. On May 12, the customer went to the bank to inquire about the payment and met with the manager. The manager said the payme
1. A bank auditor met with the senior operations manager to discuss a customer’s complaint that an auto
loan payment was not credited on time. The customer said the payment was made on May 5, its due
date, at a teller’s window using a check drawn on an account in the bank. On May 10, when the
customer called for a loan pay-off balance to sell the car, he learned that the payment had not been
credited to the loan. On May 12, the customer went to the bank to inquire about the payment and met
with the manager. The manager said the payment had been made on May 11. The customer was
satisfied because no late charge would have been assessed until May 15. The manager asked whether
the auditor was comfortable with this situation.
The auditor located the customer’s paid check and found that it had cleared on May 5. The auditor
traced the item back through the computer records and found that the teller had processed the check
as being cashed. The auditor traced the payment through the entry records of May 11 and found that
the payment had been made with cash instead of a check.
Required: discuss what type of embezzlement scheme is being
depicted and how it operates.
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