how to detect lapping schemes
a lapping scheme can be detected by tracing how cash receipts have been applied to customer accounts if there is evidence that cash receipts are routinely being applied to the wrong customer accounts then there is likely an active lapping scheme in progress another indicator of a lapping scheme is an employee who refuses to take the vacation time they ve earned this is because lapping requires that the lapper the individual engaged in the fraud is involved every day and so is unable to take any vacation time one telltale sign of lapping is a rise in the aging of accounts receivable a lapping scheme can only temporarily hide the theft sooner or later the shortfall will show up and have to be recorded as a loss lapping schemes typically happen in smaller companies where only one person may handle cash receipts and customer billing 