Watch for Vendor Payments Using Personal Credit Cards

Have you ever asked the company or department you’re auditing if personal credit cards are used to pay vendors? We’ve recently seen this in a few fraud investigations, and it appears to be a red flag.

If someone can control or facilitate the purchases of vendors in high volume, they can personally benefit by earning points on their card. This can alter how someone chooses a vendor, the amount being purchased, etc. In essence, the person receiving the benefit can lose objectivity.

Our investigations found that all high-volume vendors who accepted a credit card payment were moved to one card that was paid by the company. The person (management) who held the card then used the points to take personal trips.

Consider this the next time you test vendor controls and payment activities.


Todd has more than 20 years of experience providing client solutions in consulting, accounting and tax matters. He has performed business valuations for a variety of purposes, including gift and estate tax, business planning, succession planning and for solvency purposes in bankruptcy. Todd is experienced in providing expert testimony, and his assistance with litigation matters includes reconstruction of financial records, tracing of transactions, damages analysis and valuations related to shareholder disputes and solvency analysis in bankruptcy and for marital dissolution.

Todd Burchett – who has written posts on BKD Forensics.

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