What is a common red flag of register disbursement schemes?

What is a common red flag of register disbursement schemes?

• A. Voided transactions are well documented
• B. Cashiers have full control over all transactions
• C. Multiple refunds or voids just under a review limit
• D. Transactions are regularly audited by supervisors

Answer: (C)

A common red flag of register disbursement schemes is the occurrence of multiple refunds or voids just under a review limit. This behavior often indicates an attempt to manipulate the register in order to avoid detection, as employees may know that refund amounts exceeding certain thresholds will trigger scrutiny or audits. By intentionally keeping the refund amounts below this limit, they may believe they can evade oversight while still committing fraudulent acts. The pattern of issuing numerous small refunds or voids can usually be linked to attempts to misappropriate funds without raising alarm among management, especially if these transactions align closely with operational limits designed to catch abnormal activity. While the presence of well-documented voided transactions can suggest a level of compliance, it may not necessarily indicate that fraudulent activity isn't occurring. Full control over transactions by cashiers could enable fraud to happen covertly, and regular audits by supervisors imply oversight rather than a red flag. Thus, the contextual significance of low-value transactions being repeated makes option C the most indicative of potential fraud.

A common red flag of register disbursement schemes is the occurrence of multiple refunds or voids just under a review limit. This behavior often indicates an attempt to manipulate the register in order to avoid detection, as employees may know that refund amounts exceeding certain thresholds will trigger scrutiny or audits. By intentionally keeping the refund amounts below this limit, they may believe they can evade oversight while still committing fraudulent acts.

The pattern of issuing numerous small refunds or voids can usually be linked to attempts to misappropriate funds without raising alarm among management, especially if these transactions align closely with operational limits designed to catch abnormal activity.

While the presence of well-documented voided transactions can suggest a level of compliance, it may not necessarily indicate that fraudulent activity isn't occurring. Full control over transactions by cashiers could enable fraud to happen covertly, and regular audits by supervisors imply oversight rather than a red flag. Thus, the contextual significance of low-value transactions being repeated makes option C the most indicative of potential fraud.