Asset Misappropriation Flashcards
7 cards from real CFS practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Asset Misappropriation flashcards as text
According to ACFE research, approximately what percentage of occupational fraud cases involve asset misappropriation?
Answer: Approximately 86%
The ACFE Report to the Nations consistently shows asset misappropriation represents approximately 86% of all occupational fraud cases, making it the most frequent category.
Which of the following best defines a 'skimming' scheme?
Answer: Taking cash before it is entered into the accounting system
Skimming is an off-book scheme where cash is stolen before any record of the receipt is created, making detection through records alone nearly impossible.
The 'lapping' scheme is primarily used to:
Answer: Conceal a cash shortage by applying subsequent customer payments to offset prior thefts
In a lapping scheme, an employee steals one customer's payment and covers it by applying the next customer's payment, creating a perpetual cycle of misapplication.
A billing scheme using a shell company typically involves:
Answer: Submitting invoices from a fictitious company controlled by the fraudster
Shell company billing schemes involve the fraudster establishing a fictitious vendor entity and submitting invoices for goods or services never actually provided.
What is the critical difference between cash larceny and skimming?
Answer: Cash larceny occurs after the cash is recorded; skimming occurs before it is recorded
The timing distinguishes these schemes: skimming is off-book theft before recordation, while cash larceny involves stealing cash that has already been entered into the accounting records.
Which control is most effective at preventing payroll fraud involving fictitious (ghost) employees?
Answer: Segregation of duties between HR and payroll combined with periodic headcount verification
Segregating HR functions (adding/removing employees) from payroll processing, combined with physical headcount verification, prevents one person from unilaterally creating and paying ghost employees.
An employee submits claims for reimbursement of 500 miles of business driving that never actually occurred. This is classified as:
Answer: A fictitious expense scheme
Claiming reimbursement for expenses that never occurred constitutes a fictitious expense scheme, as the underlying cost was entirely fabricated rather than merely exaggerated.