In short
Misappropriation of assets is theft of an entity's assets, such as skimming cash, stealing inventory, paying fictitious vendors or adding ghost employees to the payroll. It is one of the two types of fraud auditors consider, alongside fraudulent financial reporting.
Key takeaways
- It is often committed by employees, in relatively small amounts.
- It is frequently concealed with false records or documents.
- Fraudulent financial reporting is more often committed by management, sometimes by overriding controls.
Where it's tested
AUD: Fraud Risk — study notes, a five-minute revision sheet and practice questions.
Practise: 3 questions
Question 1 of 3 · 0 answered
An employee steals customer payments and covers the theft by applying later collections from other customers to the earlier accounts. This scheme is: