Understanding Embezzlement and Skimming in the Retail Industry

Discussion 4 The fraudulent appropriation of funds or assets that are legitimately in one's possession for personal use constitutes embezzlement (Crumbley et al., 2017). A person who embezzles steals from their employer. There are several types of employee fraud. In the retail industry, the most common form is skimming. Generally skimming occurs when cash from a sale is not recorded in the accounting books. Instead of processing the sale, an employee may divert the cash to themselves and create fake transactions or process no transactions at all. This type of fraud is difficult to detect because it is an off-book crime and leaves no paper trail (Rogers, 2017). Even though there is no paper trail, there are still ways to detect this type of fraud. A point-of-sale (POS) system can be used to track which employees are in charge of each transaction. Using this, one can search for suspicious transactions, such as "no sale" or voided transactions (Rogers, 2017). It may be cause for concern when a single employee consistently produces these kinds of transactions. The POS system can also be used to spot other suspicious activities, like using discounts when they are not appropriate or applicable, inventory loss, or making excessive write-offs for