Revenue skimming occurs at the Point of Sale : pocketing the cash and ringing- or never indicating – “no sale”, pocketing rents, insurance premiums, cash to avoid payment of income taxes.
Keeping in mind the “Three R’s” – revenues, receivables and refunds, data from the ACFE reports Revenue is by far the most popular target for skimming. Revenue skimming is an off-book fraud. Accounts Receivable and Refund Skimming are on-book frauds.
Skimming revenue, before it hits the books and records, can be the Achilles Heel for the Auditor and evidence must be proved circumstantially. In criminal cases “beyond a reasonable doubt”; in civil cases by the “preponderance of evidence”.