Defalcation and areas it may happen in the entity.

Defalcation is defined as the act or instance of embezzling cash or goods, and is caused by non-segregation of duties. Areas in which defalcation could occur include:



  • if the chief cashier cashes a debtor’s cheque and fails to record the receipt;
  • assets and goods may be intercepted and may not be on record;
  • assets may also be taken out after they have been properly recorded.

These circumstances will lead to either temporary or permanent concealment.

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