General
If an employee is on vacation and brings a receipt for reimbursement, what do you do?
Question whether it is personal or business, most likely not eligible for reimbursement.
This term refers to the fraudulent practice of submitting false or exaggerated business expenses for personal gain.
What is expense reimbursement fraud?
The best way to prevent expense fraud is by setting clear guidelines, also known as this.
What is an expense reimbursement policy?
Your coworker told you they are submitting some personal dinner receipts to get reimbursed, what is the ethical thing to do?
Tell on them/ Report to your supervisor.
When your travel expenses seem suspiciously high, but you “totally had to fly first class for a very important client meeting,” you're probably committing this type of scheme.
What is over-purchasing or overstated expenses?
A fraudster might provide only the top portion of these financial documents, omitting the part that details what was actually purchased.
What are credit card statements?
This expense fraud happens when an employee submits receipts for personal items disguised as business expenses.
What is mischaracterized expenses?
This method of checking randomly selected expenses helps to deter employees from submitting fraudulent claims.
What is an audit?
Fraudsters sometimes submit expense reports to a supervisor in this position, knowing they are less familiar with their work schedule and duties.
What is a supervisor outside their department?
This is the high-tech fraud technique where an employee uses their elite skills in Microsoft Paint to turn a $5 coffee receipt into a $50 steak dinner.
What is receipt alteration?
Who is most likely to undertake in these expense schemes?
Expense schemes seem to be undertaken by high-level employees, owners, or officers. Many times, the perpetrator had authority over the account from which expenses were reimbursed.
This occurs when an employee alters or falsifies documentation to increase the amount of a legitimate business expense.
What is overstated expenses?
This type of approval process, requiring more than one person to review and authorize expenses, helps reduce the risk of fraud.
What is a multi-level approval system?
A fraudster may submit expenses that seem excessive compared to their peers, which can be detected using this kind of comparison.
What is comparing expense reimbursements per employee?
In this method of fraud, an employee takes "work-life balance" to new heights by submitting a reimbursement for their trip to the Bahamas, labeling it as “team-building with sea turtles.”
What is personal travel disguised as business travel?
What is the most common way expense reimbursement fraud happens?
When the perpetrator is not required to submit support documentation.
This type of fraud involves submitting fake receipts for expenses that never actually occurred.
What are fictitious expenses?
To investigate fraud, companies often check the authenticity of these documents, which detail the actual purchases made.
What are receipts or invoices?
Comparing claimed business expenses to these records can help detect fraudulent claims made for non-business days.
What are work schedules/vacation schedules
Submitting an expense for “emergency business supplies” when it’s really your new PS5 purchase is sure to lead to this kind of company reaction.
What is disbelief, followed by termination?
The use of generic or non-itemized receipts is often a sign of this type of fraudulent practice.
What is receipt manipulation?
This red flag involves expense reports with vague descriptions such as "miscellaneous" or "client meeting."
What is a lack of expense details?
What is one way you can prevent these schemes?
Utilizing Records
Establishing Policies
Trend Analysis
Organizations can use this method of comparing current expenses with prior years to detect any unusual increases in reimbursement claims.
What is historical trend analysis?
Claiming your $200 noise-canceling headphones as “essential study aids” for your CPA exam prep, because “I needed complete silence to focus on depreciation schedules,” might earn you this employer reaction.
What is a polite rejection (and a suggestion to study in a library)?