ACFE Asset Misappropriation Schemes 3

Question 1

Which type of check tampering scheme involves an employee intercepting outgoing checks and forging the payee's endorsement to deposit them personally?

Accepted Answer

Forged endorsement scheme

Answer

A forged endorsement scheme occurs when an employee intercepts a legitimately issued check and forges the payee's signature to redirect the funds.

Question 2

A sales representative collects customer cash payments and records them as 'sales returns' to balance the books. This concealment technique is known as:

Accepted Answer

Write-off scheme

Answer

Recording stolen cash as fictitious write-offs, returns, or discounts is a false account entries concealment method used in skimming schemes.

Question 3

Under the ACFE Fraud Tree, which of the following is a sub-category of payroll schemes?

Accepted Answer

Ghost employees

Answer

Ghost employees—fictitious workers added to payroll to divert paychecks—are a recognized sub-category under payroll fraud in the ACFE Fraud Tree.

Question 4

An employee uses a company credit card for personal purchases and submits the statements for payment. This scheme is BEST categorized as:

Accepted Answer

Expense reimbursement fraud

Answer

Charging personal expenses to a company credit card and seeking reimbursement or payment is classified as expense reimbursement fraud.

Question 5

Benford's Law is most effective as an analytical tool for detecting asset misappropriation because:

Accepted Answer

It reveals unusual digit distributions in financial data suggesting manipulation

Answer

Benford's Law predicts natural digit frequency distributions, and deviations—such as an excess of numbers just below approval thresholds—can signal fabricated transactions.

(ACFE) Association of Certified Fraud Examiners Practice Test

(ACFE) Association of Certified Fraud Examiners Practice Test

ACFE Asset Misappropriation Schemes 3