ACCT 310 Chapter 4 – Billing Schemes 100%

Chapter 4 – Billing Schemes 1. Categories of billing schemes include which of the following? a. Shell company schemes b. Larceny billing schemes c. Fictitious disbursements schemes d. All of the above 2. In a scheme, the perpetrator uses false documentation to cause a payment to be issued for a fraudulent purpose. a. Purchasing b. Skimming c. Larceny d. Billing 3. In the Fraud Tree, all of the following are categories of fraudulent disbursements except: a. Payroll schemes b. Cash larceny c. Check tampering d. Billing schemes 4. Fictitious entities created for the sole purpose of committing fraud are called: a. Ghost companies b. Non-accomplice vendors c. Shell companies d. “Rubber stamp” companies 5. In order to start up a shell company, the fraudster will most likely need which of the following? a. Certificate of incorporation b. Mailing address c. Bank account d. All of the above 6. Warning signs of a shell company scheme include which of the following? a. Invoices lacking details of the items purchased b. A vendor that is not listed in the phone book c. An unexpected and significant increase in “consulting expenses” d. All of the above 7. A pass-through scheme is usually undertaken by someone who works in which department? a. Accounts payable b. Receiving c. Purchasing d. Accounts receivable 8. Which of the following actions is least likely to help prevent and detect schemes involving fraudulent invoices from non-accomplice vendors? a. Marking “paid” on every voucher that has been paid b. Verifying vendor address changes before disbursements are issued c. Matching all bank statement items to canceled checks d. Separating the duties of purchasing, authorizing, and distributing payments 9. are schemes in which the employee intentionally mishandles payments that are owed to legitimate vendors. a. Pass-through schemes b. Pay-and-return schemes c. Shell company schemes d. Switch-and-swap schemes 10. In a shell company scheme, which of the following methods might a fraudster use to get a phony invoice approved for payment? a. Collusion b. A “rubber stamp” supervisor c. Falsification of purchase orders and receiving reports d. Any of the above 11. Purchasing personal items using an organization’s money is what type of scheme? a. Larceny scheme b. Billing scheme c. Pay-and-return scheme d. Skimming scheme 12. Which of the following controls can be used to prevent or detect personal purchases on company credit cards? a. Having credit card statements sent directly to someone with signature authority on the account for review and payment b. Requiring employees to receive store credits rather than cash when returning items they purchased with the company’s credit card c. Monitoring credit card expenses for unexplained increases in purchasing levels d. All of the above 13. According to the 2012 Report to the Nations on Occupational Fraud and Abuse, the most common fraudulent disbursement schemes were: a. Billing schemes b. Check tampering schemes