Question

What are the five check tampering schemes? Pick two of the categories and describe: a. How the check tampering occurs; b. Three red flags associated with the check tampering schemes: c. Three methods used by forensic accountants to detect the check tampering schemes. TT T Arial # 3 (12pt) T E

Answer 1

Check tampering occurs when an employee has easy access to the business checking account that makes him east to alter or  steal a check that is payable from the company's business account. Easy access to blank checks make this as an appealing act of occupational fraud for an employee who is in need of a quick cash. Schemes of check tampering are.

1. Altered Checks
2. Forged Checks
3. Concealed Checks
4. Authorize Maker

1) Concealed checks ; They are fraudulent checks which are submitted in a batch to the authorized signer so the signer doesn't notice any irregularity and signs all the checks for a sudden.

2) Altered checks ; It occurs when name of the payee or the destination account of the check is  changed to that of the fraudster's accounts who then misappropriates fund.

Three red flags associated with tampering schemes

1 - Corruption scheme red flags

2 - Skimming scheme red flags

3 - Billing scheme red flags

Methods to prevent check tampering

1. Separate the duties of check preparation, signing and delivery.
2. Separate the duties of check preparation and check reconciliation.
3. Check canceled checks against the entry in the books.