Final answer:
Accounts payable fraud is indicated by balances that are too high, too low, too perfect, or which stay the same over extended periods, suggesting potential errors or manipulation in financial records.
Step-by-step explanation:
Accounts payable fraud often manifests in financial records in various ways. Analytical symptoms of accounts payable fraud most frequently relate to reported accounts payable balances that appear too high, too low, or too perfect. When the accounts payable appear too low, it might suggest the possibility that some invoices are not being recorded. If the balances appear too high, it could indicate that payments are being delayed or fictitious expenses have been recorded, leading to inflated payables. An accounts payable balance that seems too perfect, where figures regularly meet benchmarks or expectations with uncanny regularity, may indicate manipulations to create a false appearance of financial health. Accounts payable balances that stay the sameover long periods can also be a red flag since it is unusual for a company not to have any change in its payables over time if it is actively conducting business.
As exemplified in the given scenario with Noel who found a significant mistake on an equipment bill, it's crucial for businesses to have diligent staff members who scrutinize financial documents. Quick action like Noel's in flagging potential errors can prevent financial losses due to mistakes or fraud.