Teeming and lading is a bookkeeping fraud also known as short banking , delayed accounting and lapping. It involves the allocation of one customer's payment to another in order to make the books balance and often in order to hide a shortfall or theft.
Teeming & lading is method by which the person who handles the cash uses the money for some days and show the transaction after some time. He receives cash but does not deposit the same and will instead use it for a personal purpose. When another payment comes to him he will deposit that money against first money used, and does not show the new amount received, and this process will be followed regularly.
One of the common practices that is performed in this fraudulent activity, is that the amounts received from the subsequent debtor is credited to the earlier debtor's account so that one debtor's account does not show an outstanding balance for a long time. Such a process is continued until the time the original amount misappropriated is finally replaced or until the cashier is caught.
Another similar strategy is applied when remittances are received by means of cheques, where cheques are split up to record payments. This is known as splitting cheques. Here by encashing the cheques, less amount is credited to the debtor and rest of the amount is misappropriated.
Auditors pay special attention during the vouching process as part of the verification of transaction to identify teeming and lading.