CFE Asset Misappropriation Schemes 2

Question 1

An employee submits expense reports for the same business meal twice, once using the restaurant receipt and once using a credit card statement. This is an example of which scheme?

Accepted Answer

Multiple reimbursement scheme

Answer

A multiple reimbursement scheme involves submitting the same legitimate expense more than once through different documents to obtain duplicate payments.

Question 2

Which of the following best describes a 'lapping' scheme in accounts receivable?

Accepted Answer

Stealing a customer payment and covering it with a subsequent customer's payment

Answer

Lapping involves stealing one customer's payment and then using a later customer's payment to cover the first theft, creating a rolling shortage.

Question 3

A warehouse employee removes inventory for personal use and disguises the shortage by creating fictitious 'damaged goods' write-offs. Which internal control would most directly detect this fraud?

Accepted Answer

Periodic physical inventory counts reconciled to perpetual records

Answer

Physical inventory counts compared to perpetual records reveal unexplained shrinkage that cannot be fully justified by legitimate write-offs.

Question 4

Under the ACFE's classification of asset misappropriation, 'skimming' differs from 'cash larceny' primarily because:

Accepted Answer

Skimming occurs before the cash is recorded in the company's books

Answer

Skimming is an off-book scheme where cash is stolen before it enters the accounting records, making it harder to detect through record review.

Question 5

An accounts payable clerk creates a vendor in the system using her own home address and submits invoices for services never rendered. This scheme is best classified as:

Accepted Answer

Shell company scheme

Answer

A shell company scheme involves establishing a fictitious vendor entity—often with no real business operations—to submit fraudulent invoices.

Certified Fraud Examiner Exam Practice Test

Certified Fraud Examiner Exam Practice Test

CFE Asset Misappropriation Schemes 2