Internal Controls & Fraud Prevention Flashcards
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Read the first 7 Internal Controls & Fraud Prevention flashcards as text
Which element of the COSO framework addresses an organization's shared values, ethics, and operating style?
Answer: Control Environment
The Control Environment is the foundation of the COSO framework and sets the tone through shared values, ethics, and management's operating style.
A healthcare billing department employee creates fictitious patient accounts and posts payments to those accounts. This best describes which fraud scheme?
Answer: Ghost patient fraud
Ghost patient fraud involves creating fictitious patients to divert payments or inflate revenue figures.
Under the False Claims Act, the qui tam provision allows:
Answer: Private individuals to file lawsuits on behalf of the government and share in any recovery
The qui tam provision lets private whistleblowers (relators) file FCA lawsuits on the government's behalf and receive 15–30% of any recovery.
When an accounts payable clerk both approves invoices and issues payment checks, which internal control principle is violated?
Answer: Separation of duties
Separation of duties requires that authorization, custody, and recordkeeping functions be divided among different employees.
A hospital CFO notices that supply expense increased 18% while patient volume grew only 4%. Which analytical procedure best investigates this discrepancy?
Answer: Ratio analysis of supply cost per adjusted patient day
Ratio analysis of supply cost per adjusted patient day normalizes for volume and isolates whether unit costs genuinely rose.
Which type of internal control is designed to discover errors or irregularities that have already occurred?
Answer: Detective control
Detective controls identify problems after they occur, such as reconciliations, audits, and exception reports.
The OIG Work Plan is best described as:
Answer: An annual publication identifying OIG audit and investigative priorities for the coming year
The OIG Work Plan is published annually and signals which billing practices and program areas the OIG intends to scrutinize.
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