Question

Allison Duval, CFE, has been retained by National Mortgage Company to investigate some suspicious activity. As part of her examination, Duval compares the company’s payroll expenses to budgeted projections and to prior years’ totals. She also runs an exception report looking for any employees whose compensation has increased disproportionately over the prior year. She then compares the payroll files to the human resource files to test for differing salary rates. What type of scheme is Duval most likely looking for?
a. Ghost employee scheme

b. Payroll tampering scheme

c. Commission scheme

Answer 1

Available Options are:

a. Ghost employee scheme

b. Payroll tampering scheme

c. Commission scheme

d. Falsified hours and salary scheme

Answer:

Option D. Falsified hours and salary scheme

Explanation:

The reason is that many frauds in the payroll department includes the manipulation of the hours and salary scheme which also includes the ghost employee schemes. In the given scenario, the forensic auditor is investigating disproportionate increases which is often because of two reason which includes falsified hours and salary schemes.