ACFE Asset Misappropriation Schemes 4

Question 1

Which of the following BEST describes a 'pass-through' billing scheme?

Accepted Answer

An employee creates a fictitious vendor that buys goods at cost and resells them to the employer at inflated prices

Answer

An employee steals inventory and sells it to a competitor

Answer

An employee submits personal expenses as business expenses

Answer

An employee intercepts vendor refund checks

Question 2

A company discovers that several payments just below the $10,000 manager approval threshold were made to a new vendor. This pattern is MOST indicative of:

Accepted Answer

Structuring to avoid controls

Answer

Lapping

Answer

Larceny of checks

Answer

Inventory shrinkage

Question 3

Which control BEST prevents a single employee from both initiating and approving vendor payments?

Accepted Answer

Dual authorization requirements

Answer

Positive pay

Answer

Bank reconciliation

Answer

Physical access restrictions

Question 4

An employee steals blank company checks, makes them payable to herself, and signs them using the controller's signature stamp. This is classified as:

Accepted Answer

Forged maker scheme

Answer

Forged endorsement scheme

Answer

Authorized maker scheme

Answer

Altered payee scheme

Question 5

According to the ACFE Report to the Nations, what is the MOST common detection method for asset misappropriation schemes?

Accepted Answer

Tip

Answer

External audit

Answer

Internal audit

Answer

Management review

Question 6

A buyer accepts personal gifts from a vendor in exchange for awarding contracts at above-market prices. How does this relate to asset misappropriation?

Accepted Answer

It is a form of corruption, not asset misappropriation

Answer

It is a billing scheme under asset misappropriation

Answer

It is a cash larceny scheme

Answer

It is a non-cash misappropriation

Question 7

Which analytical procedure is MOST effective at detecting fictitious vendor invoices when no goods or services were received?

Accepted Answer

Three-way matching of purchase orders, receiving reports, and invoices

Answer

Aging of accounts receivable

Answer

Bank reconciliation

Answer

Payroll register review