Which fraudulent act often involves fake customers?

The act involving fake customers is correctly identified as fictitious revenue. This scheme occurs when a company reports revenue from sales that never actually happened. Often, this involves creating false or "phantom" customers. These fabricated transactions are recorded in financial statements to inflate revenue figures, thereby misleading stakeholders about the company's financial health.

Phantom sales can also involve fictitious customers, but the core focus of fictitious revenue schemes is on the misrepresentation of actual revenue. The goal is to present a false financial position, leading to potential investment and operational decisions based on inaccurate data.

Kickbacks and embezzlement, while they represent forms of fraud, do not directly pertain to the creation of fake customers. Kickbacks involve bribery for awarding contracts or business, and embezzlement refers to the theft of funds placed in one's trust or belonging to one's employer. Both of these are distinct from the specific issue of inflating revenue through fake sales and customers.