how and why is cash highly susceptible to fraud?

Question

in both buisness and non buisness entities

Answer 1

Cash is difficult to trace for the most part. Since this is the case it is easiest to spend and can be spent immediately after a theft. That liquidity makes cash the most enticing fraud.

It is hard to identify stolen money, especially if it has been laundered. Criminals take the money and then declare the ill gotten money is income from a legitimate business. Once the money looks like standard income, they spend it freely. That is how the Mafia worked for so many years.

Take care,
Troy

Answer 2

1

Answer 3

As a former auditor, I must say that cash is the LEAST susceptible to fraud. First, cash is easily accountable, can be reconfirmed and will always have an audit trail. Second, you can make up asset value for most things but $1 is worth $1. Third, cash usually has some of the best internal controls to protect it.

Naturally, cash is what fraudsters are after. You never hear about crooks trying to pinch the goodwill, deferred tax assets or the factory fixtures. But, I digress. Fraudsters usually won't mess with cash directly - they are going to mess with accounts payable, investment revaluation accounts, liability reserve claw-backs and other places that are easier to manipulate. Once they have manipulated that, there are ways of getting cash indirectly. But it's tough to go "in the front door".

That's why they give the cash balance to the new hire auditors straight out of university.

Now, non-business is a different story. Cash is king because it is a auditless trail if you never deposit it. That's why there's anti-laundering rules in place. Hence, that's why Vito the Mobster doesn't give receipts, doesn't write checks and certainly doesn't take American Express.

Answer 4

Its easier to copy cash, either paper or metal, than hack a computer.
Its easy to get rid of the fake cash and end up with change in real cash or goods which can be sold.
Non cash transactions need id, bank accounts and addresses for deliveries.

Answer 5

A similar thing happened to me, and whether or not this is fraud does not really matter (but it certainly sounds like it was an attempt). You did the sensible things that i did not, such as recording conversations and such like, and considering the way they treated you, you should definitely take this further. I would start by phoning your insurance company and asking them what the best action should be first as they may offer to deal with it (especially if you took that lovely legal protection on the policy). Good luck and don't let these bastards get away with it. Please. Too many people like us suffer as a result of other's selfishness.

Answer 6

Its diificult to tell where its come from. ie, drug sales, sales of stolen items/ illegal copies etc. Get the picture. All large cash transactions will be subject to scrutiny or the person accepting the cash could face at least 5 years in prison.

Answer 7

paper products and currency are somewhat easy to counterfeit, however, the authorities are usually right on top of it and it is usually a federal offense.

Answer 8

cash is hard to trace

Answer 9

cause its worth something,
its easy to copy
is this your homework

Answer 10

Ask OCBC.