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.