The scheme in which the same vendor is receiving favorable treatment can be found in purchases by vendor searches.
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A. B.A
The statement is true. One of the red flags for potential fraud in purchasing is when a vendor receives favorable treatment, such as getting paid more or faster than other vendors, without any legitimate reason. One way to detect this type of scheme is to perform a purchases by vendor analysis, which involves examining all the purchases made to a particular vendor over a certain period and looking for any irregularities. This analysis can reveal patterns of overbilling, duplicate payments, or other anomalies that may indicate fraud.
Moreover, if the vendor is receiving favorable treatment, it may indicate that there is a conflict of interest or kickback scheme involving employees who are responsible for making purchasing decisions. The vendor may be paying bribes or kickbacks to the employees in exchange for the favorable treatment. Therefore, it is important to thoroughly investigate any suspicious findings from a purchases by vendor analysis to determine if fraud is occurring and who may be involved.
In summary, purchases by vendor analysis can be a useful tool for detecting fraud, particularly when looking for red flags such as vendors receiving favorable treatment. This analysis can help uncover irregularities and patterns that may indicate fraudulent activity, allowing investigators to take appropriate action to stop the scheme and prevent future losses.