Question

Forensic Accounting and Fraud Examination - Second Edition

Chapter 5 - Review Question 5

What are the differences between forged maker and forged endorsement schemes?

Answer 1

A forged maker scheme is a check tampering scheme in which a employee misappropriate a check and fraudulently affixes the signature of an authorized maker thereon.Whereas forged endorsement schemes are check tampering schemes in which an employee intercepts a company check intended for a third party and converts the check by signing third party's name on the endorsement line of the check.

For forged endorsement schemes the employee is stealing a check that is intended for a third party.This created the concealment problem because the third party is expecting the check and will call complaining if they do not get payment.The employee stealing the check will have to find a way to issue a check to the third party to cover up for stealing the initial check.A forged maker scheme is one in which an employee of a company steals a valid check from that company and signs the check in the authorities makers signature.