Jed Butler is an internal auditor for Billings Industries. Recently he ran a program that identified customer accounts which had previously been dormant for six months or more but had sales in the last two months of the year. What type of fraud would this test most likely reveal?

Question

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The test is likely to reveal a commission scheme, in which an employee might create fake or dormant accounts and then generate sales through those accounts in order to receive commissions. By identifying these accounts as dormant but suddenly active, the auditor can detect this fraudulent activity.

Jed Butler Is an Internal Auditor for Billings Industries