A receptionist/bookkeeper at a small dental practice was the only one who knew the software to track patient data (i.e. bills, payments) as well as being the one who prepared deposits of receipts for the bank. She figured out how she can input data and prepare a deposit slip for the owner to take to the bank before inputting cash into the system. The deposit slip given to the owner did not show certain cash receipts, and hence he had no idea the bookkeeper had in fact pocketed the money. She entered the cash into the system after printing the deposit slip, just in case a patient should ever be questioned about his or her account. The bookkeeper left the job without being caught. However, a patient came in after she left and asked for a receipt for the cash she had paid two weeks before. The new bookkeeper, not yet familiar with the system, asked the boss for the deposit slip he had so she can give the correct amount to the patient. The slip had no cash deposit on it however. They went into the computer file and figured out what happened.

1) Identify risks and/or red flags in this case that provided the opportunity for fraud.

2) Identify controls that needed to be put in place that might have mitigated this risk.

3) Is this skimming or larceny? Explain the difference.