Which of the following is an example of a fictitious expense reimbursement scheme?

• A. An employee travels for business but submits a family vacation receipt
• B. An employee generates a fake receipt using basic software
• C. An employee submits a receipt for a hotel reservation in one report and a copy of the credit card statement reflecting the same reservation in the next period's report
• D. An employee alters an electronic receipt to reflect a higher cost

Answer: (B)

Fictitious expenses hinge on creating a false cost that never occurred and using that fake documentation to get reimbursed. The scenario where an employee generates a fake receipt with basic software is the clearest example: a document is fabricated to support a reimbursement claim for a cost that didn’t happen. This directly embodies making up a receipt to obtain funds, which is the essence of a fictitious expense scheme.

Other options involve misrepresenting real expenses or manipulating legitimate documents rather than inventing a completely new, non-existent expense. For instance, charging personal travel as business is improper and a form of misstatement, duplicating or shifting records crosses period boundaries to conceal duplications, and altering an existing receipt to show a higher amount is falsification of a real document. While all are fraudulent, they’re different kinds of misconduct than creating a wholly fictitious expense.