11 Why do most shell company schemes involve the purchase of

11. Why do most shell company schemes involve the purchase of services rather than goods?

MULTIPLE CHOICE

a. When the billing scheme involves fictitious goods, the defrauded company may be able to detect the fraud by comparing purchases to inventory levels.

b. Services are more costly than goods.

c. Normally services go through a less stringent approval process as goods.

d. Most companies purchase more services than goods.

12. True or False?  Banks are always required to reimburse customers for forged checks.

13. In a concealed check scheme an employee prepares a fraudulent check and submits it usually along with legitimate checks to an authorized maker who signs it without a proper review.  

True

False

		a. When the billing scheme involves fictitious goods, the defrauded company may be able to detect the fraud by comparing purchases to inventory levels.
		b. Services are more costly than goods.
		c. Normally services go through a less stringent approval process as goods.
		d. Most companies purchase more services than goods.

Solution

11) option a is the correct answer when the billing scheme involves fictitious goods ,the defrauded company may not be able to detect the fraud by comparing purchases to inventory levels Reason-this is beause services are intangible and hence non- existent ,therefore it becomes difficult to verify whether they were actually deliverd 12) FALSE though the onus is on banks , it is not always the case. If the bank can prove two things that it accepted the check in good faith and deligence and ordinary care was excrcised - it may not be liable. 13) TRUE