(2) Misposted Transactions or Postings to the Wrong Account
A misposted transaction can create repercussions not only to the detriment of the business but to the customer as well.
A cash deposit for Savings Account No. 123 was encoded in the teller’s validating machine as a cash deposit for Savings Account No. 132. The teller's input will automatically reflect on the records of SA No. 132, while none will appear on the records of SA No. 123.
The trial balance for the day’s transaction was balanced since all transactions involving cash deposits and withdrawals were properly recorded. However, what the trial balance does not tell is that Savings Account No. 123 is understated while Savings Account No. 132 is over-credited.
Implications: If the depositor of SA No. 132 withdraws the entire amount reflected as deposited in his account, the withdrawal will still appear as a regular transaction. However, if a check clears against the rightful deposit account, which in this case is SA No. 123, there’s a possibility that the check will be returned for insufficient funds, and the customer’s account will be penalized with overdraft charges.
The owner of SA No. 123 can file a lawsuit against the bank for mishandling his account and make further claims for indemnity for damaging the depositor’s reputation, caused by the inappropriately returned check. On the other hand, the bank can take remedial actions against the holder of SA No.132 for withdrawing funds that were not rightfully his. This has to be settled in court though, because the bank has to show proof that the depositor’s action was not in good faith. Regardless of the outcome, the bank's reputation is at risk for not exercising due diligence in handling their depositors' accounts.
Remedies: All automated transactions for the day should be reviewed for possible human errors. Computers are only capable of automating the accounting system based on inputs supplied by humans. A control officer, usually the accountant, should also check the frequency of misposted deposits or withdrawals and determine if there’s any possibility of fraud involved.