What is teeming and lading?

Answer 1

Most businesses require employees to have access to at least some of the business' cash or bank accounts. Several controls may be ineffective, allowing an employee to misappropriate actual cash assets.

Once the cash has been taken or transferred to the fraudsters account, the discrepancies should become obvious in the bank reconciliations. To get around this fraudsters often allocate the missing debits to the trade debtors' accounts. This latter part is the teeming and lading.

There are many ways through which this can be accomplished. An example is passing an entry in the accounting system as follows:

- Debit - DEBTOR CUSTOMER A - $10,000

- Credit - CASH - ($10,000)

The employee has the cash; meanwhile the missing debits are allocated to a genuine trade customer.

This can be done via a direct journal posting or by effecting indirect inputs into the accounting system. An example is refunding a cash sale and then re-recording it as a credit sale has the same affect.

Answer 2

The word 'teeming' is the present participle, present tense of the verb to teem, meaning to be swarming with, to be full of.

The present participle of the verb also functions as an adjective.

Examples:

The store was teeming with last minute holiday shoppers. (verb)

A teeming crowd has gathered along the president's route. (adjective)