To analyze vendor purchases for abnormal levels on both a monthly and a yearly basis, is the billing scheme prevention method which is helpful in:

Question

Options

• Areview payments coding for abnormal billing
• Bdeterrence of billing fraud
• Creturning merchandise for cash billing
• Dpurchases on credit card or company account

• A
  5% (1)
• B
  73% (16)
• C
  5% (1)
• D
  18% (4)

Explanation

Analyzing vendor purchases for abnormal levels on both a monthly and yearly basis is a billing scheme prevention control that functions as a deterrent - when employees know that payment patterns are being monitored for anomalies, they are less likely to attempt fraudulent billing schemes such as shell company invoices or inflated vendor payments. This ongoing surveillance signals that irregularities will be caught, which suppresses fraudulent behavior before it starts.

Why the distractors are wrong:

• A describes reviewing payment coding - a different, narrower activity focused on categorization errors, not the broad vendor-level anomaly monitoring described.
• C (returning merchandise for cash) describes a separate fraud scheme - a refund/cash-theft scheme - which is unrelated to vendor purchase analysis.
• D (credit card or company account purchases) refers to expense reimbursement and corporate card misuse schemes, a different fraud category from vendor billing.

Memory tip: Link the word "abnormal" to "deter" - spotting what's abnormal is what deters fraudsters. If you remember that monitoring = deterrence in fraud prevention, option B will always stand out as the purpose behind periodic vendor purchase review.

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