Hello friend! I hope you are doing well. Today I am going to talk about teaming and lading in accounting. In one of the articles I have previously written, I mentioned these terms. So what is teaming and lading?
I. It is a type of fraud. Yes, a type of fraud. Why do I say this? It is because it is usually done by the cashier in an organization.
II. It takes place in an organization with many debtors in its accounts.
III. So how does this type of fraud take place? I will give you an illustration using an example; If XYZ limited has the following debtors, namely; Wanjiru & Company, Smith & Company and Otieno & Company. When Wanjiru & Company brings in money for clearing a debt it has with or owes the organization, the cashier will not record that amount as paid in the accounts. She or he will take that amount of money and use it for his or herself. When Smith & Company also comes and brings an amount of money to pay off the debt it has with the same organization, the cashier will take this amount and use it to reduce the amount owed by Wanjiru & Company. When Otieno & Company also comes to pay their debt off in the same organization, the cashier will use this amount to reduce the debt owed by Smith & Company. Therefore there will always be a gap in the book of accounts because the cashier had misappropriated the funds.
That is it for today! I hope you did find this information helpful. Thank you and come again!