Authority to Grant Discounts for Revenue Skimming
Question
Employees with the authority to grant discounts in order to skim revenues may use which authority?
Answers
Explanations
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A. B. C. D.A
In the context of the Certified Fraud Examiner (CFE) exam question you provided, employees who have the authority to grant discounts in order to skim revenues are likely engaging in fraudulent activities. Let's analyze each answer option to determine the correct choice:
A. False discounts: This answer option refers to employees creating fictitious or fraudulent discounts that are not supported by any legitimate reason or transaction. These false discounts would allow the employees to manipulate revenues and misappropriate funds. While this option seems plausible, we need to evaluate the other answer choices before reaching a conclusion.
B. Recording a discount on sale procedure: This answer option suggests that employees manipulate the procedure for recording discounts during sales transactions. By improperly applying discounts or misrepresenting the nature of discounts, they can manipulate the revenue figures and divert funds for personal gain.
C. Internal discount sales audits: This answer option refers to audits conducted internally within the organization to identify and review discount sales. These audits aim to detect any irregularities or abuses in the discount granting process. While this choice addresses the issue of monitoring and detecting fraudulent discounts, it does not directly relate to the authority to grant discounts.
D. None of the above: This answer option suggests that none of the provided choices accurately describe the authority used by employees who grant discounts to skim revenues.
Based on the explanations above, the most appropriate answer would be B. Recording a discount on sale procedure. This option specifically addresses the authority of employees to manipulate the recording process of discounts during sales transactions, which enables them to skim revenues for personal gain. However, without further context or information from the specific exam question, it is important to carefully review the provided options and consider the question requirements before making a final selection.
