ACC 312G EXAM 2
Purchasing fraud risks include all of the following EXCEPT:
Buying goods or services at market rates
Buying goods or services that are overpriced
Buying goods or services for personal use
Buying goods or services that are non-existent - ANS Buying goods or services at market rates
The main reason the inherent risk impact is higher for personal purchases with purchase orders
than with personal purchases with credits cards is because:
Credit cards do not require multiple approvals like purchase orders
Credit cards are more likely to be stolen than purchase orders
Credit cards are harder to use than purchase orders
Credit cards have lower authorization limits than purchase orders - ANS Credit cards have
lower authorization limits than purchase orders
Which of the following is false about shell companies?
Shell company schemes generally originate outside the purchasing department
Shell companies may sell goods to employers at inflated prices, keeping the difference between
the shell company's purchase price and sale price as profit
Shell companies usually have a mailing address so they can receive payments
Shell companies generally register with the state or county so they can open a bank account -
ANS Shell company schemes generally originate outside the purchasing department
All of the following are types of non-accomplice vendor schemes EXCEPT:
Pays wrong vendor, then requests return of payment or refund and deposits it in employer
organization's bank account
Double pays vendor, then requests return of second payment or refund and steals it
Submits counterfeit invoice then steals check or has it delivered to perpetrator's mail box
Overbills organization, then requests a refund from vendor and steals refund - ANS Pays wrong
vendor, then requests return of payment or refund and deposits it in employer organization's
bank account
According to the heat maps, which fraud scheme has the highest inherent risk?
Shell Company
Personal Purchases with Credit Cards
, Personal Purchases with Purchase Orders
Non-Accomplice Vendor - ANS Shell Company
A key control to prevent personal purchases with purchase orders is to segregate all of the
following authorizations EXCEPT:
Purchase Requisition
Payment Voucher
Sales Order
Purchase Order - ANS Sales Order
Before authorizing payments, invoices should be matched to all of the following documents
EXCEPT:
Purchase Order
Receiving Report
Purchase Requisition
Shipping Report - ANS Shipping Report
Which of the following is the most important control for preventing payments to shell
companies?
Identify invoices and checks paid to unapproved vendors
Periodically check existence and independence of suppliers by management independent of
purchasing function
Approve authorized supplier list by management independent of purchasing function
Analyze unusual invoices paid to vendors - ANS Approve authorized supplier list by
management independent of purchasing function
What is the major purpose of non-accomplice vendor controls?
Prevent perpetrator from misleading vendors
Detect perpetrator after misleading vendors
Detect perpetrator non-accomplice vendor frauds
Prevent perpetrator from receiving checks - ANS Prevent perpetrator from receiving checks
The most important control for detecting credit card fraud is:
Purchases are delivered to organization's delivery addresses
Credits cards limits set for individual purchases, monthly purchases, and business authorized
SIC codes
Reviewer independent of credit card authorized signer carefully reviews each transaction's
documentation for business purpose
Purchasing fraud risks include all of the following EXCEPT:
Buying goods or services at market rates
Buying goods or services that are overpriced
Buying goods or services for personal use
Buying goods or services that are non-existent - ANS Buying goods or services at market rates
The main reason the inherent risk impact is higher for personal purchases with purchase orders
than with personal purchases with credits cards is because:
Credit cards do not require multiple approvals like purchase orders
Credit cards are more likely to be stolen than purchase orders
Credit cards are harder to use than purchase orders
Credit cards have lower authorization limits than purchase orders - ANS Credit cards have
lower authorization limits than purchase orders
Which of the following is false about shell companies?
Shell company schemes generally originate outside the purchasing department
Shell companies may sell goods to employers at inflated prices, keeping the difference between
the shell company's purchase price and sale price as profit
Shell companies usually have a mailing address so they can receive payments
Shell companies generally register with the state or county so they can open a bank account -
ANS Shell company schemes generally originate outside the purchasing department
All of the following are types of non-accomplice vendor schemes EXCEPT:
Pays wrong vendor, then requests return of payment or refund and deposits it in employer
organization's bank account
Double pays vendor, then requests return of second payment or refund and steals it
Submits counterfeit invoice then steals check or has it delivered to perpetrator's mail box
Overbills organization, then requests a refund from vendor and steals refund - ANS Pays wrong
vendor, then requests return of payment or refund and deposits it in employer organization's
bank account
According to the heat maps, which fraud scheme has the highest inherent risk?
Shell Company
Personal Purchases with Credit Cards
, Personal Purchases with Purchase Orders
Non-Accomplice Vendor - ANS Shell Company
A key control to prevent personal purchases with purchase orders is to segregate all of the
following authorizations EXCEPT:
Purchase Requisition
Payment Voucher
Sales Order
Purchase Order - ANS Sales Order
Before authorizing payments, invoices should be matched to all of the following documents
EXCEPT:
Purchase Order
Receiving Report
Purchase Requisition
Shipping Report - ANS Shipping Report
Which of the following is the most important control for preventing payments to shell
companies?
Identify invoices and checks paid to unapproved vendors
Periodically check existence and independence of suppliers by management independent of
purchasing function
Approve authorized supplier list by management independent of purchasing function
Analyze unusual invoices paid to vendors - ANS Approve authorized supplier list by
management independent of purchasing function
What is the major purpose of non-accomplice vendor controls?
Prevent perpetrator from misleading vendors
Detect perpetrator after misleading vendors
Detect perpetrator non-accomplice vendor frauds
Prevent perpetrator from receiving checks - ANS Prevent perpetrator from receiving checks
The most important control for detecting credit card fraud is:
Purchases are delivered to organization's delivery addresses
Credits cards limits set for individual purchases, monthly purchases, and business authorized
SIC codes
Reviewer independent of credit card authorized signer carefully reviews each transaction's
documentation for business purpose
