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So, let's talk about something that feels a little old-school but is a huge deal on fraud and audit exams: check tampering. You might be thinking, "Checks? Who even uses checks anymore?" Well, businesses do. A lot. And where there's a check, there's a way to steal. The exam loves to test this because it's all about connecting the dots—the paper trail, the internal control weakness, the specific type of fraud.
Imagine you're the forensic accountant called in. The company knows money is missing, but they don't know how. You get a mountain of bank statements and canceled checks. And right away, you see a few things that just feel... off. A signature for the CEO looks a little shaky on one check. A vendor name you don't recognize pops up over and over. An amount seems way too high for office supplies. Your job is to turn that gut feeling into hard evidence. That's what we're breaking down today.
Think of a company's checkbook like the key to its treasury. Check tampering is just all the different ways someone can create a fake key or misuse a real one. These schemes aren't usually covered by one single law called "check tampering." Instead, they fall under big-deal criminal statutes like fraud, forgery, and embezzlement. The core of it is always someone exploiting a weak spot in the process.
Let's walk through the main ways this happens. The most straightforward is a forged maker scheme. This is exactly what it sounds like. An employee gets their hands on a blank company check and just forges the signature of someone who's authorized to sign—the "maker" of the check. Maybe they steal a few checks from the back of the book. The key here is the signature itself is fake. So when you're investigating, you’re literally comparing that signature to known, valid ones.
But what if the signature is perfectly legitimate? That brings us to a forged endorsement scheme. Here, the check is totally proper. It's written to a real vendor, for a real amount, and signed by the actual CEO. But a fraudster inside the company intercepts it before it goes in the mail. They flip it over, forge the vendor’s signature—the endorsement—on the back, and then sign their own name and deposit it into their own account. The front of the check looks fine. The crime is on the back. So you wouldn't catch this by looking at the maker's signature; you'd find it by contacting the vendor who says, "Hey, we never got paid."
Then you have the alteration schemes. This is where a legitimate check is doctored. In an altered payee scheme, an employee takes a signed check and changes who it's made out to. They might use correction fluid or sophisticated software to change the payee from "ABC Vendor Inc." to their own name or a shell company they control.
Similarly, they could pull an altered amount scheme. They take that same legitimate check, maybe one for $100, and they carefully add a zero to make it $1,000. Or they change the written amount from "One Hundred" to "One Thousand." The check was real, the signature is real, but the money value has been inflated. For both of these, your detection method is simple: you compare the physical, cashed check from the bank to what's recorded in the company's accounting system. They won't match.
And that brings us to the sneakiest one, in my opinion: concealed checks. In this scheme, the signature is 100% real. The check itself is fraudulent, made out to a fake vendor or the fraudster themselves. But how does it get signed? The employee slips it into a big stack of legitimate checks they give the CFO to sign on a busy Friday afternoon. The CFO is rushing, sees a stack of 25 invoices, a stack of 25 checks, and just signs them all, not realizing one of them is a complete fabrication. The fraud isn't the signature; it's the deception used to get the signature. So your focus here isn't handwriting—it's the supporting documentation. Or the lack of it.
So, when you suspect something is up, what’s the playbook? First, you just get a feel for the landscape. You'll spread out the bank statements and canceled checks. You’re looking for anything weird—checks paid to employees, payments to vendors you've never heard of, nice round numbers, checks that are out of sequence.
Once you’ve flagged the suspicious ones, you start comparing them to the company's own records, like the cash disbursements journal. This is where the story starts to take shape. A check that cleared the bank but was never even recorded in the books? Huge red flag. Or a check that's recorded as paying Vendor A, but the canceled check shows it was paid to some person? That’s your smoking gun.
From there, you zoom in. You look closely at the signatures, the handwriting on the back for the endorsement. You might even need to bring in a handwriting expert. You'll also start investigating the payees. Are these real companies? Do they have a physical address? You might even call them up to confirm they received the payments the company claims to have sent.
This is also when you take a step back and look at the whole system. The internal controls. Almost always, these schemes are possible because of a breakdown in the segregation of duties. If the same person can write the checks, get them signed, and then reconcile the bank account, you’ve basically just handed them the keys to the kingdom.
Let's walk through a quick example. Say you're reviewing checks and find several made out to 'Office Supply Co.' for amounts like $1,000, which seems high. You look in the accounting records, and sure enough, they're booked as 'Office Supplies.' But your gut tells you something's off. So you call the real Office Supply Co. and they say, "Yeah, we got your payments... for $100 each." Now you know. You get the physical canceled checks from the bank and see it clear as day. The amount was originally 'One Hundred Dollars' and someone squeezed in the word 'Thousand' and added a zero. That's a classic altered amount scheme. Your next move is to figure out who had access to those checks after they were signed.
And when you find that check, you need to make sure it can be used in court. That's where the Federal Rules of Evidence, or FRE, come in. FRE 901 and 902 are about authenticating evidence—proving the altered check is what you say it is. You can use an expert or even a non-expert who is familiar with the handwriting. And to get the bank statements and accounting records admitted, you’ll rely on FRE 803(6), the business records exception. It basically says that records kept in the normal course of business are considered reliable.
Now, a classic exam trap. A question describes an employee who intercepts a check going to a vendor, signs the vendor's name on the back, and cashes it. It asks you what kind of scheme this is. The tempting answer might be 'forged maker'. But that's wrong. The *maker's* signature—the company's—was real. The fraud was forging the *payee's* signature. So the correct answer is forged endorsement. Always ask yourself: whose signature is fake, or what part of the check was changed?
Okay, let me throw a scenario at you. You find a bunch of checks on the bank statement that are completely missing from the company’s accounting records. They’re made out to people you don’t recognize, but the CFO’s signature looks legit. What scheme are you likely looking at?
(slight pause)
That smells like a concealed check scheme. The CFO was probably tricked into signing them. Your first step is to get copies of those checks and start investigating those mystery payees.
How about this one: A payroll clerk processes a final paycheck for an employee who just left. The clerk intercepts the check, changes the payee name to their own, and cashes it. What's the scheme, and what's the control weakness?
(slight pause)
That’s an altered payee scheme. And the glaring weakness is the segregation of duties. The same person who processes payroll shouldn't also be able to distribute the physical checks.
So, to keep it straight for exam day: Forged Maker is a fake signature on the front. Forged Endorsement is a fake signature on the back. Altered Payee or Amount is a real check that's been doctored. And a Concealed Check is a fraudulent check that a real person was tricked into signing.
Look, mastering these distinctions is what separates a good score from a great one. And getting reps with realistic questions is the best way to do it. If you want more practice on this and every other topic for your exam, check out Vora Prep dot com. VoraPrep is a full exam-prep app — lessons, practice questions, and an AI tutor in one place. You can get started and try it out for free.
Check tampering questions are puzzles. They give you the pieces—the bank statement, the weird vendor, the weak control—and you just have to know how to put them together. You can do this.
Alright, that's it for this one. Keep up the great work. I'll talk to you on the next one.