Question

Jim Stevens is a payroll manager for a mid-sized insurance company in the southeast. Last year, his performance review was conducted late, so he received a retroactive pay increase. Because he was not authorized to access his own employee records, Stevens stole another employee’s password and logged into the payroll system. He manipulated his records to keep the retroactive pay increase in effect in future periods, effectively doubling his intended pay raise. What type of fraud is this?

A. Larceny of wages.
B. Falsified hours and salary scheme.
C. Commission scheme.
D. Ghost employee scheme.

Answer 1

B. Falsified hours and salary scheme.

Step-by-step explanation:

Based on the information provided within the question it can be said that the type of fraud that is being described is a falsified hours and salary scheme. This is a type of fraud in which the individual makes changes to certain documents in order to trick payroll into paying more than what the individual was supposed to get paid. Which is what Jim did by manipulating his records in order to keep the pay increase permanently in all future paychecks.