Name three common forms of asset misappropriation.

Name three common forms of asset misappropriation.

• A. Cash skimming, shell company or fictitious vendors, inventory theft.
• B. Payroll fraud and tax evasion.
• C. Embezzlement, insider trading, and money laundering.
• D. Phishing, social engineering, and identity theft.

Answer: (A)

Asset misappropriation is about employees stealing or misusing an organization’s assets. Three forms that are widely recognized as common examples are cash skimming, shell company or fictitious vendors, and inventory theft. Cash skimming occurs when cash is taken before it’s recorded in the books, so the loss isn’t reflected in revenue or cash balances. Shell companies or fictitious vendors involve creating fake suppliers to redirect payments away from legitimate purchases, siphoning funds out of the organization. Inventory theft is the physical taking of goods from the inventory for personal use or resale, directly reducing the company’s assets. The other options describe fraud types that don’t involve direct misappropriation of assets in the typical sense, such as tax-related crimes or information-focused attacks, so they don’t fit as three common asset misappropriation forms.