In the accounts payable function, the most likely fraud scenario involves the creation of fictitious vendors.
This fraud can lead to improper disbursements where payments are made to non-existent entities, effectively siphoning money out of the organization. This type of fraud is easier to execute in accounts payable compared to other functions because it can involve relatively straightforward manipulations of vendor master files and payment processes. Such schemes can result in significant financial losses and are a common concern for internal auditors reviewing accounts payable controls.References:
* IIA Practice Guide on Accounts Payable Risks and Controls.
* Association of Certified Fraud Examiners (ACFE) publications on common fraud schemes.