Sheila's unauthorized purchases for a company she owns are an example of which type of occupational fraud?

• A. An invoice kickback scheme
• B. A pay and return scheme
• C. A personal purchases with company funds scheme
• D. An expense reimbursement scheme

Answer: (C)

Using company funds for personal purchases is asset misappropriation through personal purchases with company funds. When someone in control of company spending uses corporate money for non-business items, it’s a deliberate diversion of assets for personal benefit, done without proper authorization and often concealed in the books. Sheila owns the company and makes purchases that don’t serve the business, which fits this pattern exactly because there’s no legitimate business purpose and no approved reimbursement process involved.

The other options describe different fraud mechanics: an invoice kickback scheme relies on collusion with vendors to generate kickbacks, a pay-and-return scheme involves taking money and returning it to disguise the loss, and an expense reimbursement scheme centers on submitting false receipts for reimbursement. None of these match the scenario where personal items are purchased directly with company funds.