What is a common red flag indicating a register disbursement scheme?

What is a common red flag indicating a register disbursement scheme?

• A. Multiple cashiers operating from separate cash drawers
• B. Voided transactions are properly documented
• C. Cashiers authorized to void their own transactions
• D. All register refunds are reviewed by supervisors

Answer: (C)

A common red flag indicating a register disbursement scheme is when cashiers are authorized to void their own transactions. This situation creates opportunities for misconduct, as the cashier can manipulate the system to create the illusion of legitimate cash disbursements while diverting funds for personal gain. This access enables the potential for fraudulent actions without the immediate oversight or checks that would deter this type of behavior. When cashiers can process voids independently, it can lead to a lack of accountability and oversight, which are critical in maintaining the integrity of financial transactions. This practice goes against typical controls, where transactions being voided should ideally be subjected to supervisory review to ensure proper justification and prevent fraud. In contrast, the other options describe circumstances that either promote better security (like having multiple cashiers with separate drawers or supervisor reviews of refunds) or indicate proper documentation (like properly documented voided transactions), which can help reduce the risk of fraud rather than highlight a potential scheme.

A common red flag indicating a register disbursement scheme is when cashiers are authorized to void their own transactions. This situation creates opportunities for misconduct, as the cashier can manipulate the system to create the illusion of legitimate cash disbursements while diverting funds for personal gain. This access enables the potential for fraudulent actions without the immediate oversight or checks that would deter this type of behavior.

When cashiers can process voids independently, it can lead to a lack of accountability and oversight, which are critical in maintaining the integrity of financial transactions. This practice goes against typical controls, where transactions being voided should ideally be subjected to supervisory review to ensure proper justification and prevent fraud.

In contrast, the other options describe circumstances that either promote better security (like having multiple cashiers with separate drawers or supervisor reviews of refunds) or indicate proper documentation (like properly documented voided transactions), which can help reduce the risk of fraud rather than highlight a potential scheme.