The most common method of misappropriating funds from the payroll is the:

Question

Options

• Acrediting wages
• Bghost employee payment
• Coverpayment of wages
• Dfraudulent disbursements

• A
  5% (1)
• B
  14% (3)
• C
  77% (17)
• D
  5% (1)

Explanation

Overpayment of wages is the most common payroll misappropriation method because it exploits an existing, trusted relationship - employees simply falsify timesheets, inflate hours worked, or manipulate pay rates, requiring no elaborate setup and leaving a paper trail that blends with legitimate activity.

Why the distractors are wrong:

• A (crediting wages) is not a recognized standard fraud category; it doesn't describe a specific misappropriation method and is therefore a nonsense distractor.
• B (ghost employee payment) is a real and serious scheme, but it ranks below overpayment in frequency because it demands more effort - creating fictitious employee records, establishing diversion accounts, and maintaining the fiction over time.
• D (fraudulent disbursements) is a broad umbrella term covering many fraud types across an organization, not a payroll-specific method; it's too general to be the most common payroll technique.

Memory tip: Think "least effort, most common." An employee padding their own timesheet is far simpler than inventing a fake coworker - so the simplest manipulation (overpayment) wins in frequency. When in doubt, payroll fraud starts with the people already on the payroll.

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