ACFE Procurement Fraud and Vendor Schemes 2

Question 1

Which form of bid rigging involves competitors agreeing in advance on who will win a particular contract?

Accepted Answer

Bid rotation

Answer

Bid rotation is a collusion scheme where competitors take turns winning contracts, ensuring each participant gets a share of the business over time.

Question 2

What is 'complementary bidding' in a bid rigging conspiracy?

Accepted Answer

Submitting intentionally losing bids to make a predetermined winner appear competitive

Answer

Complementary bidding involves conspirators submitting deliberately high or otherwise unacceptable bids so that the designated winner appears to win a legitimate competition.

Question 3

Under the Sherman Antitrust Act, bid rigging is classified as which type of violation?

Accepted Answer

A per se illegal violation

Answer

Bid rigging is treated as a per se illegal violation under the Sherman Antitrust Act, meaning it is automatically illegal regardless of any claimed justification.

Question 4

Which purchasing scheme involves an employee authorizing payment for goods received at inflated prices due to a secret arrangement with the vendor?

Accepted Answer

Overbilling scheme

Answer

An overbilling scheme involves a vendor charging more than the agreed or market price, with an employee facilitating this in exchange for a kickback from the excess amount.

Question 5

Which control is most effective at preventing employees from creating fictitious vendors?

Accepted Answer

Requiring dual authorization for vendor master file changes

Answer

Requiring dual authorization (two separate employees) to add or modify vendor master file records prevents any single employee from creating a fictitious vendor unilaterally.

(ACFE) Association of Certified Fraud Examiners Practice Test

(ACFE) Association of Certified Fraud Examiners Practice Test

ACFE Procurement Fraud and Vendor Schemes 2