Question

Which of the following is a red flag indicating that an employee may be receiving kickbacks?

a) The purchase of inferior-quality inventory or merchandise
b) An unusual high volume of purchases from a particular vendor
c) The payment of purchase amounts that are frequently above market rates
d) All of the above

Answer 1

All the listed options, including the purchase of inferior-quality inventory, unusually high volume of purchases from a specific vendor, and payment of above-market rates, are red flags that an employee may be receiving kickbacks. The correct option is d) All of the above

Step-by-step explanation:

To address the question of which red flag might indicate that an employee is receiving kickbacks, the correct answer is d) All of the above. The potential indicators that an employee might be involved in kickbacks include:

• The purchase of inferior-quality inventory or merchandise, might suggest that the employee is choosing a supplier not based on the quality of goods but on the personal benefit received from the supplier.
• An unusually high volume of purchases from a particular vendor might imply a preferential treatment that could relate to receiving something in return.
• The payment of purchase amounts that are frequently above market rates could indicate that the employee is compensating the supplier for the kickback through higher payments.

All these scenarios could suggest a lack of ethical procuring practices and hint at the possibility of kickbacks. The correct option is d) All of the above