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(4 marks)
49
 
A warehouse manager instructs staff not to record returns of goods to suppliers if the goods have 
already been entered into inventory records, as this will be 'sorted out by the accounts 
department'. 
Is this action potentially fraudulent? 

No 

Yes, as an example of removal of assets from a business 

Yes, as an example of intentional misrepresentation of the financial position of a business 
(1 mark) 
50 
Which of the following would be regarded as fraud prevention measures? 

Requiring all quantities to be written in words rather than numbers 

Requiring all staff to take full holiday entitlements 

Defining standard procedures for normal business operations 

All of the above 
(2 marks)
51 
Only allowing purchasing staff to choose suppliers from an approved list is an example of what 
sort of fraud prevention measure? 

Segregation of duties 

Limitation 
controls 

Appropriate 
documentation 
(1 mark)
52 
Which of the following internal controls might be least effective in preventing fraud, if staff are in 
collusion with customers? 

Physical 
security 

Requiring signatures to confirm receipt of goods or services 

Sequential numbering of transaction documents 

Authorisation 
policies 
(2 marks)
BPP Tutor Toolkit Copy

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PRACTICE QUESTION BANK 
 
523 
53 
Match the feature of the payables and creditors system to the control aims given: 
A Ordering 
C Accounting 
B 
Receipt and invoices 
(i) 
Cut-off is applied correctly to the purchase ledger 
(ii) 
All goods and services received are accurately recorded 
(iii) 
Orders are only made to authorised suppliers 
(2 marks)
54 
Match the feature of the receivables and sales system to the control aims given: 
A 
Ordering and granting credit 
B Despatch 
and 
ordering 
C 
Recording, accounting and credit control 
(i) 
Credit notes are only given for valid reasons 
(ii) 
Orders are recorded correctly 
(iii) 
All sales that have been invoiced are recorded on the nominal and sales ledgers 
(2 marks)
55 
Leticia runs a highly successful model agency. She relies on her bookkeeper to control the 
financial side of her business. However, the bookkeeper left recently and, due to business 
pressures, Leticia has employed a temp rather than spend time recruiting a permanent 
replacement. Leticia was looking at the business bank statements recently and became 
concerned by amounts of cash being paid into and out of the business account. She questioned 
the temp who said that one of the models had requested payment in cash and one of their new 
overseas customers was paying in cash 'to avoid tax problems at home'. This has never happened 
before. Leticia is extremely concerned that the temp and model may be colluding to commit fraud 
and that her bank account may be being used for money laundering. 
(a)