Certified Fraud Examiner Practice

Question: 1 / 400

What does a Need Recognition Scheme refer to?

A legitimate bidding process between companies

A framework for identifying financial needs

A conspiracy to rig bids based on false service needs

A Need Recognition Scheme is specifically related to the fraudulent practice of manipulating the bidding process to give the appearance of legitimate business needs while actually conspiring to rig bids. In this scheme, parties involved create false service needs or requirements that mislead other competitors into believing there is a real demand for the services in question. This results in a controlled bidding environment, allowing the conspirators to secure contracts at predetermined prices that may not reflect true market value.

By presenting a façade of necessity, this scheme deceives both competitors and possibly clients, ultimately bringing unethical gains to those orchestrating the fraud. Recognizing this type of fraudulent scheme is critical for fraud examiners as it underscores the importance of careful scrutiny in procurement processes to ensure integrity and transparency.

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A method for assessing project requirements

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