Exam 4: Billing Schemes

____________________ are schemes in which the employee intentionally mishandles payments that are owed to legitimate vendors.

Purchasing personal items using an organization's money is what type of scheme?

Warning signs of a shell company scheme include which of the following?

Sally Fuller is a buyer for GWA publishing company. Her job is to purchase supplies and services for the printing of technical manuals. Her brother sets up a printing company, and Sally hires him to print most of these manuals for GWA. However, rather than actually printing the manuals, her brother hires another printer to do the work, then sells the printed manuals to GWA at a 50 percent markup. As a result, his prices are much higher than the other printers who serve GWA. This type of scheme is most likely a:

According to the 2010 Report to the Nations on Occupational Fraud and Abuse, billing schemes were the second most costly type of fraudulent disbursements schemes.

Which of the following computer audit tests can be used to detect billing schemes?

In the Fraud Tree, all of the following are categories of fraudulent disbursements except:

When a billing scheme is occurring, the company's expenses appear lower than they should, causing the financial statements to show falsely inflated profits.

In one of the case studies in the textbook, Albert Miano, the facilities supervisor for a popular magazine, submitted phony invoices. When Miano received the checks for the phony invoices, he forged the contractor's signature. He then endorsed the check in his own name. What controls weaknesses did the company have that facilitated Miano's scheme?

In one of the case studies in the textbook, Albert Miano, the facilities supervisor for a popular magazine, submitted phony invoices. When Miano received the checks for the phony invoices, he forged the contractor's signature. He then endorsed the check in his own name. How was the fraud caught?

According to the 2010 Report to the Nations on Occupational Fraud and Abuse, the most common fraudulent disbursement schemes were:

Eli Adams is an accounts payable clerk for MJF Productions. By forging signatures, he was able to procure a company credit card. He recently bought home stereo equipment and put it on his company credit card. When the credit card statement arrived at MJF, Eli prepared a check to the credit card company and buried the purchase in the monthly expenses of the company's largest cost center, knowing that his manager is generally inattentive when approving payments. What type of fraud is this?

Charles Dieter and Joey Davis worked together to steal nearly $50,000 from Valdosta Medical Supply. Charles, an accounts payable clerk, deliberately overpaid a few of the company's vendors. He then called the vendors, explained the "mistake," and asked for the excess to be refunded. Joey, a mailroom employee, intercepted the incoming refund checks and cashed them. The two men split the proceeds. What type of scheme did Charles and Joey commit?

In one of the case studies in the textbook, a Southeastern medical college was plagued with fraudulent activity. What started as an investigation into some suspicious expense reimbursement activity eventually led to the discovery of a fictitious company that was set up to fraudulently bill the college for supplies that never existed. How was the case resolved?

Which of the following actions is least likely to help prevent and detect schemes involving fraudulent invoices from non-accomplice vendors?

Invoices that are submitted by shell companies can be for fictitious goods or services or for items that were actually sold to the victim company.

Most shell company schemes involve the purchase of goods rather than services.

In a shell company scheme, which of the following methods might a fraudster use to get a phony invoice approved for payment?

In one of the case studies in the textbook, a Southeastern medical college was plagued with fraudulent activity. What started as an investigation into some suspicious expense reimbursement activity eventually led to the discovery of a fictitious company that was set up to fraudulently bill the college for supplies that never existed. What was the first sign that there were more problems than the initial expense reimbursement fraud?

In a ______________ scheme, the perpetrator uses false documentation to cause a payment to be issued for a fraudulent purpose.