CFS Asset Misappropriation 3

Question 1

Check kiting exploits:

Accepted Answer

The float time between deposit and clearance across multiple bank accounts

Answer

Weaknesses in vendor onboarding and approval procedures

Answer

Errors in the bank reconciliation process

Answer

Gaps in accounts payable invoice approval workflows

Question 2

A 'false refund' scheme in a retail environment involves:

Accepted Answer

Processing a refund transaction for a non-existent return and pocketing the cash

Answer

Returning legitimate merchandise for cash and keeping the full refund amount

Answer

Inflating refund amounts above what the customer originally paid

Answer

Exchanging merchandise for gift cards and converting them to cash

Question 3

According to ACFE research, what is the most common initial detection method for occupational fraud, including asset misappropriation?

Accepted Answer

A tip from an employee or other informant

Answer

External audit

Answer

Internal audit review

Answer

Automated fraud detection software

Question 4

An employee splits a $20,000 purchase order into four $4,999 orders to stay below the $5,000 manager approval threshold. This is known as:

Accepted Answer

Threshold splitting or structuring

Answer

Purchase order padding

Answer

Approval override scheme

Answer

Vendor collusion

Question 5

Which control is most effective at preventing a single employee from executing a billing scheme undetected?

Accepted Answer

Segregating duties so that no single employee can both add vendors and approve payments

Answer

Requiring all vendors to submit invoices electronically

Answer

Conducting an annual comprehensive vendor audit

Answer

Limiting the total number of approved vendors on the master list

Question 6

An anonymous tip hotline is considered a critical anti-fraud control primarily because it:

Accepted Answer

Provides employees a safe, confidential channel to report suspected misconduct without fear of retaliation

Answer

Allows management to monitor employee communications

Answer

Satisfies regulatory compliance requirements for public companies

Answer

Replaces the need for traditional internal audit functions

Question 7

According to ACFE guidance, which combination of proactive controls most significantly reduces both fraud losses and detection time in organizations?

Accepted Answer

Surprise audits, proactive data monitoring and analytics, and segregation of duties

Answer

Fidelity bond insurance and pre-employment background screening only

Answer

Annual external financial statement audits and physical security upgrades

Answer

Employee awareness training and zero-tolerance written policies alone