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Question - During the 1st few months of the year, Grace Frias, the cashier, was engaged in lapping operations. However, she was able to restore the amount of cash "borrowed" at the end March 31 and she refrained from any fraudulent acts after that date.
a. How does lapping activities occur?
b. Will the year-end audit lead to the discovery of Grace Frias lapping activities?
c. Suggest a possible audit procedures to uncover lapping activities.
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