Myra Manning, CFE, was hired to investigate some suspicious activity at Arizona Medical Supply after one of the company's largest customers complained several times that its account statements do not reflect all the payments it has made. While examining the accounts receivable activity, Myra noticed a significant rise in the volume of overdue accounts during the last 6 months. What type of scheme might this situation indicate?

Question

Quizplus · Accepted Answer

The significant rise in the volume of overdue accounts may indicate receivables skimming, where payments received from customers are not recorded, and the funds are diverted for personal use. This matches the complaint made by the large customer, who did not see all their payments reflected in their account statements. Cash larceny involves stealing funds after they have been recorded, while a shell company and false refunds do not match the situation described.

Myra Manning, CFE, Was Hired to Investigate Some Suspicious Activity