CFA CFA Asset Misappropriation & Embezzlement

Question 1

Which type of asset misappropriation scheme involves an employee intercepting a customer payment before it is recorded in the accounting system?

Accepted Answer

Skimming

Answer

Lapping

Answer

Fictitious disbursement

Answer

Check tampering

Question 2

An employee diverts incoming payments to cover prior theft by applying later receipts to older accounts — this is known as:

Accepted Answer

Lapping

Answer

Kiting

Answer

Ghost employee fraud

Answer

Billing scheme

Question 3

Which internal control is MOST effective at detecting a ghost employee payroll scheme?

Accepted Answer

Periodic payroll audit comparing HR records to payroll disbursements

Answer

Mandatory vacation policy

Answer

Dual authorization for invoice payments

Answer

Rotating bank reconciliation duties

Question 4

What distinguishes embezzlement from theft in a fraud examination context?

Accepted Answer

Embezzlement involves misappropriating assets lawfully entrusted to the perpetrator

Answer

Embezzlement involves external perpetrators

Answer

Embezzlement only applies to cash assets

Answer

Embezzlement requires physical removal of property

Question 5

A fraud examiner reviewing expense reimbursements notices that an employee submits the same hotel receipt twice in different expense reports. This is an example of:

Accepted Answer

Multiple reimbursement scheme

Answer

Fictitious expense scheme

Answer

Mischaracterized expense scheme

Answer

Personal purchase scheme

Question 6

Which scheme involves an employee creating fictitious vendors in the accounts payable system and submitting fraudulent invoices for payment?

Accepted Answer

Shell company scheme

Answer

Bid rigging

Answer

Payroll padding

Answer

Register disbursement fraud