The ACFE Fraud Examiners Manual addresses Expense Reimbursement Schemes under Asset Misappropriation: Fraudulent Disbursements and separates the discussion into:
Detection of Expense Reimbursement Schemes
Prevention of Expense Reimbursement Schemes
The Manual specifically identifies “Detailed Expense Reports: Submission and Review” as the prevention approach for expense reimbursement fraud.
Why A is correct
Requiring all employees to submit receipts electronically is not, by itself, a preventive control recognized by the Manual. The ACFE’s prevention focus is on requiring detailed expense reports , adequate supporting documentation, and careful review—not merely changing the format of submission from paper to electronic. In fact, because expense reimbursement fraud often involves altered receipts , fictitious receipts , and other manipulated support, simply requiring electronic submission does not meaningfully prevent the scheme. The Manual lists schemes such as altered receipts and producing fictitious receipts , showing that the problem is the authenticity and review of documentation, not whether the receipt is submitted electronically.
Why the other options are helpful
B. Comparing current expenses to budgeted expense amounts
This is helpful because the Manual includes review and analysis of expense accounts as part of detecting these schemes. Comparing reported expenses to expected or budgeted levels can reveal unusual spikes or anomalies that may indicate fraud.
C. Requiring employees to explain the specific business purpose of each expense
This is clearly helpful and consistent with the Manual’s prevention emphasis on detailed expense reports and proper documentation. Requiring a specific business purpose makes it harder to submit personal, inflated, or fictitious expenses.
D. Comparing current expenses to historical expenditure amounts
This is also helpful because the Manual’s review and analysis of expense accounts supports analytical comparisons to identify irregularities, trends, or unexplained increases in reimbursements. Historical comparison is a classic way to spot padded or abnormal expense claims.
Conclusion
Under the ACFE Manual, prevention of expense reimbursement schemes depends on detailed reporting, documentation, and review . Merely requiring receipts to be submitted electronically does not address whether the receipts are false, altered, duplicated, or unsupported. Therefore, the choice that would NOT be helpful in preventing expense reimbursement schemes is:
A. Requiring all employees to submit receipts electronically
References
ACFE Fraud Examiners Manual, 2020 International Edition
Expense Reimbursement Schemes
Detection of Expense Reimbursement Schemes / Review and Analysis of Expense Accounts
Prevention of Expense Reimbursement Schemes / Detailed Expense Reports: Submission and Review
Altered Receipts / Producing Fictitious Receipts
