Which of the following is not an example of misappropriation of assets?a. The treasurer of the company makes an unauthorized wire transfer from the organization's bank to a personal account in Grand Cayman. b.The president of the company utilizes the organization's cash to add a floor to her 15,000 square foot house. c.The chief financial officer of the company falsely adds $20 million to the accounts receivable and revenue accounts. d.A warehouse employee takes home two units of electronic entertainment inventory each week without authorization.

The correct answer is:

The chief financial officer of the company falsely adds $20 million to the accounts receivable and revenue accounts. (d.)

Explanation:

Internal fraud refers to the activities that lead to unexpected financial, material or reputational loss, resulting from the fraudulent actions of internal persons in a firm. Fraudulent activities are broadly divided into two groups: Fraudulent financial reporting and Misappropriation of assets.

Misappropriation of assets therefore, is the actual stealing or the diversion of an organization's assets for personal use or other use other than to the benefit of the organization. In the options given in the question, all the options except option 'd' are examples of the misappropriation of assets, because there is a direct or indirect theft of the assets(cash or tangible asset) for a use other than the company's, However, option 'd', 'The chief financial officer of the company falsely adds $20 million to the accounts receivable and revenue accounts', is an error of original entry'. This is also not fraudulent because adding an amount to receivable is not suspicious of stealing money, it most likely is a mistake. Other misappropriation of asset examples include:

skimming: theft of cash before recording in the journals, credit card abuse, fictitious vendor schemes, ghost employees, fictitious expenditure, etc.

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