Course · Act II: Due Diligence · Chapter 10
Cash fraud and bank confirmations
Why cash is checked with bank confirmations sent by the auditor, not the client, why trapped or pledged cash doesn’t reduce net debt, and how unconfirmed cash is priced at zero.
Key terms
- Bank confirmation
- A request the auditor sends directly to a bank, which replies directly to the auditor with the balances. The company never handles it.
- Trapped cash
- Cash that exists but can’t be used to repay debt: pledged as collateral, blocked abroad, or owed back to customers.
“Cash That Isn’t There” is part of the full course: 6 puzzles on cash fraud and bank confirmations. Biscuit Barrel is fictional; the frauds in the notes are real, settled cases. Try this act’s free chapter, “Adjusted EBITDA”, first.
“Cash That Isn’t There” is in Act II: Due Diligence. 6 puzzles, unlimited retries.
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