Understanding Fraud: Types, Causes, and Prevention

What is the core idea of fraud as discussed in the introduction?

• A misunderstanding between employees

• A breach of trust by an employee

• An external attack on the company

• A simple theft of cash

Which of the following is a scheme where an employee pockets cash before it is recorded?

• Lapping

• Skimming

• Check tampering

• Expense claim fraud

What is a common method of concealing cash theft in the lapping scheme?

• Adjusting the receivable sub ledger

• Padding expense claims

• Creating fake invoices

• Using company stationery

What is a significant ethical issue for multinational companies in third-world countries?

• Bribery as a normal business practice

• High taxes

• Strict environmental regulations

• Lack of skilled labor

How does extortion differ from bribery?

• It is less common in developed countries

• It involves threats to vendors or customers

• It is a legal business practice

• It involves voluntary payments

What is the most complex type of fraud discussed?

• Asset misappropriation

• Corruption

• Financial reporting fraud

• Expense claim fraud

What fraudulent practice involves shipping products to inflate sales figures?

• Check tampering

• Skimming

• Lapping

• Channel stuffing