Spot the Red Flag

Read the scenario. Identify the compliance red flags. How sharp are your instincts?

Day 80 Fraud Easy

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The Scenario

Internal audit is reviewing expense reports from your company's regional sales manager, David Park. Over the past quarter, Park submitted 47 expense reports totalling $38,000. Audit notes that 12 restaurant receipts are from the same establishment, "The Golden Table," for amounts between $480 and $520. The restaurant closed permanently in January, but receipts are dated March and April. Several taxi receipts have sequential serial numbers despite being from different dates. Park also claims mileage reimbursement for client visits on days his badge records show he was in the office all day.

Which of these are red flags?

Select all that you think are compliance red flags, then submit.

Park submitted 47 expense reports in one quarter

For a regional sales manager, 47 expense reports (roughly 4 per week) is high but not unusual given client-facing responsibilities.

Taxi receipts with sequential serial numbers from different dates

Sequential receipt numbers across different dates indicate they were likely obtained in bulk or fabricated, not from separate rides.

Total expenses of $38,000 for the quarter

The total amount alone does not indicate fraud. It must be assessed against the role and travel patterns.

Mileage claims on days badge records show office presence

Claiming travel reimbursement for days when physical records prove the person was in the office is fraudulent misrepresentation.

Receipts from a restaurant that closed before the receipt dates

Receipts dated after a business has permanently closed are clear evidence of fabricated documentation.

12 receipts from the same restaurant all near $500

Repeated meals at the same establishment for suspiciously consistent amounts near a round number suggests systematic padding.

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