An example of an asset misappropriation scheme is?

Study for the Risks and Controls Exam 2. Prepare with in-depth questions and explore detailed explanations to ensure a comprehensive understanding. Excel in your exam with confidence!

Asset misappropriation refers to the theft or misuse of an organization's assets, and larceny is a prime example of this type of scheme. Larceny involves the unlawful taking of someone else's property with the intent to permanently deprive them of it. This direct theft of cash, inventory, or other physical assets falls squarely within the definition of asset misappropriation, as it results in a tangible loss to the organization and is executed by an individual who typically has access to those assets.

The other options mentioned involve different types of misconduct or fraud. Economic extortion relates to coercing someone to obtain something of value, which is not necessarily about the misappropriation of physical assets. Illegal gratuities involve giving or receiving something of value in exchange for favorable treatment, rather than outright theft. Fictitious revenues refer to the fraudulent reporting of revenue that does not exist, which is an accounting fraud rather than a misappropriation of assets. Thus, larceny stands out as the clear example of an asset misappropriation scheme.

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