Asset Misappropriation Schemes Flashcards
7 cards from real ACFE 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 Schemes flashcards as text
Which type of check tampering scheme involves an employee intercepting outgoing checks and forging the payee's endorsement to deposit them personally?
Answer: Forged endorsement scheme
A forged endorsement scheme occurs when an employee intercepts a legitimately issued check and forges the payee's signature to redirect the funds.
A sales representative collects customer cash payments and records them as 'sales returns' to balance the books. This concealment technique is known as:
Answer: Write-off scheme
Recording stolen cash as fictitious write-offs, returns, or discounts is a false account entries concealment method used in skimming schemes.
Under the ACFE Fraud Tree, which of the following is a sub-category of payroll schemes?
Answer: Ghost employees
Ghost employees—fictitious workers added to payroll to divert paychecks—are a recognized sub-category under payroll fraud in the ACFE Fraud Tree.
An employee uses a company credit card for personal purchases and submits the statements for payment. This scheme is BEST categorized as:
Answer: Expense reimbursement fraud
Charging personal expenses to a company credit card and seeking reimbursement or payment is classified as expense reimbursement fraud.
Benford's Law is most effective as an analytical tool for detecting asset misappropriation because:
Answer: It reveals unusual digit distributions in financial data suggesting manipulation
Benford's Law predicts natural digit frequency distributions, and deviations—such as an excess of numbers just below approval thresholds—can signal fabricated transactions.
A supervisor approves overtime for employees who did not actually work those hours, splitting the fraudulent pay. This is classified as:
Answer: Falsified hours and salary scheme
Falsified hours and salary schemes involve misrepresenting time worked or pay rates to fraudulently increase payroll disbursements.
Which asset misappropriation scheme would MOST likely be uncovered by comparing the vendor master file to the employee master file?
Answer: Shell company/fictitious vendor scheme
Matching vendor addresses, phone numbers, or bank accounts against employee records can expose shell companies controlled by insiders.