CAPA Expense Management Flashcards

What is the primary purpose of expense management software in an AP department?

Answer: To automate expense report submission, approval, and reimbursement

Expense management software automates the workflow of submitting, approving, and reimbursing employee expenses, reducing errors and processing time.

Which IRS form is used to report non-employee compensation of $600 or more?

Answer: 1099-NEC

The 1099-NEC (Non-Employee Compensation) form must be filed with the IRS and provided to independent contractors paid $600 or more in a calendar year.

Under IRS substantiation rules, what four elements must be documented for a business expense deduction?

Answer: Amount, date, business purpose, and business relationship

IRS rules require documentation showing the amount, date, business purpose, and business relationship of persons involved to substantiate a business expense deduction.

What type of expense fraud occurs when an employee submits the same receipt for reimbursement twice?

Answer: Duplicate submission

Submitting the same receipt more than once to collect double reimbursement is a duplicate submission, a common form of expense fraud flagged by expense management systems.

What is the purpose of a Travel and Entertainment (T&E) policy?

Answer: Written guidelines governing employee spending on travel, meals, and entertainment

A T&E policy establishes company rules for allowable travel and entertainment expenses, spending limits, and the process for submitting and receiving reimbursement.

Which analytical control best detects unusually high or anomalous expense submissions?

Answer: Statistical analysis and benchmarking of expense patterns

Analyzing expense reports statistically and comparing them against peer benchmarks helps identify outlier submissions that may indicate errors, policy violations, or fraud.