Which statement best describes the audit‑trail difference between skimming and cash larceny?

Which statement best describes the audit‑trail difference between skimming and cash larceny?

• A. Skimming leaves an audit trail; cash larceny does not
• B. Skimming leaves no audit trail; cash larceny leaves an audit trail
• C. Both leave audit trails
• D. Neither leaves an audit trail

Answer: (B)

The key idea is how the theft timing affects what gets recorded and thus the audit trail. Skimming is theft of cash before it’s recorded, so there’s no entry in the books to show the cash was received. That means no audit trail for the stolen amount. Cash larceny, on the other hand, takes cash after it has already been recorded as a receipt, so the books show the receipt even though the cash is missing. The audit trail exists in the recorded transactions, even though the physical cash isn’t there. So the statement that skimming leaves no audit trail while cash larceny leaves one best captures the difference.

The key idea is how the theft timing affects what gets recorded and thus the audit trail. Skimming is theft of cash before it’s recorded, so there’s no entry in the books to show the cash was received. That means no audit trail for the stolen amount. Cash larceny, on the other hand, takes cash after it has already been recorded as a receipt, so the books show the receipt even though the cash is missing. The audit trail exists in the recorded transactions, even though the physical cash isn’t there. So the statement that skimming leaves no audit trail while cash larceny leaves one best captures the difference.