What are the major classes of asset misappropriation?

The classification of asset misappropriation includes skimming, larceny, and fraudulent disbursements as the major classes.

Skimming refers to the theft of cash before it is recorded in the accounting system, meaning the loss occurs before the revenue is accounted for, making it particularly insidious as it often goes unnoticed for a time. Larceny involves the taking of an asset after it has been recorded, such as stealing cash from a register or inventory. Fraudulent disbursements encompass a variety of schemes in which an employee causes a payment to be made from the organization for a benefit they have not delivered or that is not legitimate, such as creating false invoices or altering existing ones.

These categories effectively encapsulate the different methods through which employees can misappropriate assets, thus making them vital to understanding risk and control measures in accounting. Other choices include terms that may describe different facets of fraud or misappropriation but do not encompass the widely recognized major classes in this context.