Fraudulent Disbursement Schemes Review

These flashcards cover the key fraudulent disbursement schemes and their characteristics based on the lecture notes.

What are the components of a register disbursement scheme?

Fictitious refunds, overstated refunds, false voids.

How can a false refund scheme be concealed?

By destroying register tapes, issuing refunds below the review limit, or forcing inventory totals.

What differentiates register disbursement from skimming and larceny?

Register disbursement is an on-book scheme while skimming and larceny are off-book schemes.

What is the best way for an organization to prevent fraudulent register disbursements?

Maintain appropriate separation of duties.

How can a register disbursement scheme be prevented or detected?

Through random calls to customers, restricting access to management codes, and encouraging customers to review receipts.

What is the example of register disbursement fraud explained in the case of Lily Smith?

Processing multiple fictitious refunds on sales made to customers.

What type of scheme does John White's actions with overstated refunds exemplify?

Overstated refunds scheme.

What are some types of billing schemes?

Shell company schemes and fictitious disbursement schemes.

What are fictitious entities created for fraud called?

Shell companies.

What scheme is related to mishandling payments owed to legitimate vendors?

Pay-and-return scheme.

What information is needed to set up a shell company?

Certificate of incorporation, mailing address, and bank account.

What controls can help detect personal purchases on company credit cards?

Review of credit card statements, requiring store credits for returns, and monitoring credit card expenses.

Which scheme is NOT a fraudulent disbursement scheme?

Cash larceny.

What is a red flag indicating a shell company?

Invoices lacking detail and an unexpected increase in consulting expenses.

What type of fraud were James and Joey committing together?

Pay-and-return scheme.

What scheme is Lily involved in with her brother for printing manuals?

Pass-through scheme.

In Tableau, which is not a valid mark option?

Treemap.

Can a dimension in Tableau be changed to a measure?

False.

What is a phantom employee?

A worker on payroll who does not actually work for the organization.

What type of fraud does David commit by not removing terminated employees from payroll?

Ghost employee scheme.

What type of scheme might John be committing by generating uncollected sales?

Commission scheme.

What type of fraud does John Smith commit by altering payroll records?

Falsified hours and salary scheme.

What tests can be used to detect ghost employee schemes?

Extract users with payroll system access and compare timecards with payroll systems.

How can falsified hours and salary schemes be prevented?

Segregating duties in payroll preparation and authorization.

What is a scheme where employees seek reimbursement for nonexistent expenses?

Fictitious expense reimbursement scheme.

What happens when expense reports are inflated?

Overstated expense reimbursement scheme.