Occupational Fraud

Which of the following is a disclosure to the financial statements that fraudsters omit.

—Related-party transactions

—Accounts receivable

—Accounting estimates

—Asset valuation

Related-party transactions

What type of scheme is illustrated in the following scenario?

Janice in purchasing gets a call from a vendor who tells her that if she will only purchase from them then the vendor will give her a portion of the sale.

—Fake vendor scheme

—Kickback scheme

—Asset misappropriation

—Not a scheme at all and is a legitimate business relationship

Kickback scheme

Which financial statement fraud scheme classification is also know as "income smoothing"

—Improper disclosures

—Timing differences

—Concealed liabilities and expenses

—Fictitious revenues

Timing differences

What type of fraud scheme is illustrated in the following scenario?

Henry in payroll creates a new employee and adds it to the payroll.  He uses his brother-in-law's name as the new employee, but he doesn't work for the company.  Henry then allocates an ordinary salary for an entry-level employee to the new employee but directs the payments to his own bank account.

—Falsified hours and salary

—Commission schemes

—Ghost employee

—Corruption

Ghost employee

Which department does corruption most often occur?

—Accounting

—Sales

—Purchasing

—Shipping

Purchasing

T/F: The difference between cash larceny and skimming is cash larceny is when cash is stolen before the cash has shown up on the victim entity's books.

False

Which of the following is a skimming scheme?

—Fraudulent disbursements

—Billing schemes

—Lapping

—Larceny from deposit

Lapping

What type of fraud scheme is illustrated in the following scenario?

Mr. Whatsittoya is in deep with his loan shark.  He needs a way to make money quickly to save his kneecaps.  He hatches a scheme where he will take money from a customer's account to cover the loan and then he will pay off the customer's account with a payment from the following customer's payment, and so on and so forth until he can make a correcting entry to tie out AR.

—Expense reimbursement scheme

—Cash larceny

—Lapping

—Billing scheme

Lapping

Which of the following is a payment tampering scheme?

—Altered payee scheme

—Cash larceny

—Billing schemes

—Skimming

Altered payee scheme

What is financial statement fraud?

—Making a company look better on paper than it really is

—Financial statement fraud is the same as asset misappropriation

—Stealing company assets

—Paying out bribes to gain an unfair advantage

Making a company look better on paper than it really is