INV 1705: QUIZ 2 Asset Misappropriation

Which of the following situations below describes the current asset?

• Mr Ali gifted his son a luxurious car on his birthday. (fixed asset)

• Amy Furniture Sdn.Bhd successfully sold 2000 units of sofa sets in this month.

• Fina applied to get an authorized license to open a restaurant. (intangible asset)

• Mr and Mrs Ravi signed a contract with OCBC bank to obtain a house loan. (financial asset)

• Company X has patented an innovation created by their employee.

Company X has patented an innovation created by their employee.

From the statement above, suggest the type of assets Company X owned?

• Current Assets

• Fixed Assets

• Financial Assets

• Intangible Assets

Which situation below shows payroll schemes that can be done by employees?

• Stealing company's inventory for selling purpose (inventory larceny)

• Altering a purchase invoice and asked the company to pay the overbilled invoice (billing scheme)

• Manipulating the amount of salary of an employer

• Using the company photostat machine for personal use (misuse)

Cashier Supermarket X scans the items purchased by customers in the cashier system. The customer paid RM20 to the cashier but he did not put the money in the cash register. He silently takes the money for himself.

Based on the situation above, analyze the types of assets misappropriation performed by the cashier.

• Cash larceny

• Skimming

• Fraudulent disbursement

• Misuse

Choose the correct effects of asset misappropriation in a company.

I Forcing the company to go out of business

II Increase the company profit

III Losses in the company

IV Ruining the reputation of a business.

• I, II, III

• I, III, IV

• I, II, IV

• II, III, IV

Which of the situations below best describe billing schemes?

• The perpetrator submits or alters an invoice that causes his or her employer to willingly issue a check or make other types of payments.

• The perpetrator steals cash from the cash register. (Cash larceny)

• The perpetrator stole a blank cheque from his company and then wrote the cheque to himself. (Cheque tampering)

• The perpetrator uses the Company's car to go and pick up his girlfriend to show off that he has a car. (Asset misappropriation)

Which of the following is an example of asset misappropriation? (C2)

• Falsifying financial statements to inflate company profits

• Stealing company cash or inventory for personal use

• Engaging in insider trading for financial gain

• Bribing officials to secure contracts

What is the most common form of asset misappropriation? (C2)

• Financial statement fraud

• Cash theft and fraudulent disbursements

• Misrepresentation of company liabilities

• Insider trading

Which internal control measure is most effective in preventing asset misappropriation? (C3)

• Allowing employees full access to financial records

• Implementing segregation of duties

• Relying solely on external audits

• Encouraging employees to work overtime

Which of the following is NOT considered asset misappropriation? (C2)

• Embezzling company funds

• Manipulating financial statements to mislead investors

• Stealing inventory for personal resale

• Processing fraudulent expense reimbursements