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Commercial Pilot Licence (CPAER) – Canada · Question

An auditor is using data analytics to compare vendor addresses to employee addresses in the payroll master file. What type of fraud would this analysis most likely identify?

Comparing vendor addresses to employee addresses can uncover fictitious vendors that are actually employees or related parties, which is a common indicator of a

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Question: An auditor is using data analytics to compare vendor addresses to employee addresses in the payroll master file. What type of fraud would this analysis most likely identify?

Answer options:

  • Understatement of revenue. ✅ Ghost employee schemes.
  • Overstatement of inventory.
  • Employee theft of cash receipts.

Correct answer: Ghost employee schemes.

Explanation: Comparing vendor addresses to employee addresses can uncover fictitious vendors that are actually employees or related parties, which is a common indicator of a 'ghost employee' scheme or a fraudulent disbursement scheme.

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