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 of the following BEST describes a 'pass-through' billing scheme?
Answer: An employee creates a fictitious vendor that buys goods at cost and resells them to the employer at inflated prices
A pass-through scheme uses a fraudster-controlled intermediary company that purchases goods legitimately and resells them to the victim organization at a markup, generating illicit profit.
A company discovers that several payments just below the $10,000 manager approval threshold were made to a new vendor. This pattern is MOST indicative of:
Answer: Structuring to avoid controls
Keeping transactions just below authorization thresholds—known as 'threshold abuse' or structuring—is a common concealment technique in billing and disbursement fraud.
Which control BEST prevents a single employee from both initiating and approving vendor payments?
Answer: Dual authorization requirements
Dual authorization requires a second independent approver for payments, preventing one person from controlling the entire disbursement process.
An employee steals blank company checks, makes them payable to herself, and signs them using the controller's signature stamp. This is classified as:
Answer: Forged maker scheme
A forged maker scheme involves creating an unauthorized check by forging or misusing the signature of the authorized signer (the 'maker').
According to the ACFE Report to the Nations, what is the MOST common detection method for asset misappropriation schemes?
Answer: Tip
Tips—often from employees, customers, or vendors—are consistently the leading fraud detection method across all scheme categories in ACFE research.
A buyer accepts personal gifts from a vendor in exchange for awarding contracts at above-market prices. How does this relate to asset misappropriation?
Answer: It is a form of corruption, not asset misappropriation
Accepting kickbacks or gifts in exchange for favorable contract awards is classified as corruption (bribery/kickbacks) under the ACFE Fraud Tree, distinct from asset misappropriation.
Which analytical procedure is MOST effective at detecting fictitious vendor invoices when no goods or services were received?
Answer: Three-way matching of purchase orders, receiving reports, and invoices
Three-way matching requires a purchase order, a receiving report confirming delivery, and an invoice to all agree before payment is authorized, exposing invoices with no corresponding receipt of goods.