IOFM APS Accredited Payables Specialist (APS) Certification Exam Exam Practice Test

The three-way match is a standardized accounts payable process used to verify the legitimacy of a supplier invoice before payment by cross-referencing three key documents: the purchase order (PO), the supplier invoice, and the receiving documents (also referred to as the receiving report, goods received note, or delivery receipt). This process ensures that the invoice reflects the agreed-upon terms of the purchase order and that the goods or services were actually delivered as specified, thereby mitigating risks of overpayment, fraud, or errors.

The correct answer is “Receiving documents,” as these confirm the delivery of goods or services and are a core component of the three-way match. The purchase order authorizes the purchase, specifying quantities, prices, and terms. The invoice details the supplier’s request for payment. The receiving documents verify that the ordered items were delivered, matching the quantities and conditions specified in the PO.

The other options are not part of the three-way match:

Remittance adviceis a document sent to the supplier to confirm payment details after the payment is made, not part of the verification process.

Bank draftis a payment instrument, not a document used for matching.

P-card statementrelates to procurement card transactions, which are typically not subject to the three-way match process, as they follow a different reconciliation process.

The NetSuite source clearly defines the three-way match: “Three-way matching is a payment verification technique that compares the details associated with a particular purchase across a trio of related documents… Purchase order, which authorizes a purchase to be made… Delivery receipt, or a receiving report, which confirms that the purchase was delivered… Supplier’s invoice, which lists how much the buyer owes the supplier”. Similarly, the Tipalti source states: “PO Matching: Ensure accuracy and prevent fraud with 2 and 3-way PO matching,” reinforcing that the three-way match involves the PO, invoice, and receiving documents. The Ramp source further clarifies: “3-way matching is a fraud-prevention process used by accounts payable teams to verify invoices before payment. It cross-checks three documents: Purchase order (PO)… Goods received note (GRN)… Supplier invoice”.

While the IOFM APS study guide is not directly quoted in the provided sources for this specific question, the IOFM Accounts Payable Specialist Certification Program emphasizes the three-way match under the “Invoices” and “Internal Controls” modules. The program description notes that it covers “peer-tested best practices for each phase of the payment process – from receipt of invoice, through processing and payment,” which includes the three-way match process. The focus on accuracy, compliance, and fraud prevention in IOFM’s curriculum aligns with the standard definition of the three-way match involving the PO, invoice, and receiving documents.

TheTechnology and Automationtopic in the APS Certification Program covers the use of technology to streamline AP processes and the potential for outsourcing certain functions to business process outsourcing (BPO) providers. BPO is commonly used for repetitive, transaction-based tasks such as check printing, utility payments, and invoice imaging, which benefit from automation and economies of scale. However,performance monitoring—which involves analyzing AP metrics, ensuring compliance, and optimizing processes—is typically retained in-house, as it requires strategic oversight and organizational knowledge.

Option A (Performance monitoring): Performance monitoring involves tracking key performance indicators (KPIs) like invoice processing time, error rates, and compliance with internal controls. This function requires deep understanding of the organization’s goals and policies, making it less suitable for outsourcing. This is the correct answer.

Option B (Check printing): Check printing is a routine, mechanical task that can be efficiently outsourced to BPO providers with secure printing and mailing capabilities. It is a common BPO candidate, so it is not the exception.

Option C (Utility payments): Utility payments are standardized, recurring transactions thatcan be automated and outsourced to BPO providers, often integrated with electronic payment systems. This is a good BPO candidate, so it is not the exception.

Option D (Invoice imaging): Invoice imaging (scanning and digitizing invoices) is a repetitive task that leverages automation and is frequently outsourced to BPO providers with imaging technology. This is a common BPO candidate, so it is not the exception.

Reference to IOFM APS Documents: The APS e-textbook underTechnology and Automationdiscusses BPO as a strategy for “outsourcing transactional AP tasks like invoice imaging, check printing, and payment processing to improve efficiency.” It notes that strategic functions, such as “performance monitoring and analytics,” are typically retained in-house to maintain control over compliance and process optimization. The IOFM training video emphasizes that BPO is ideal for high-volume, low-complexity tasks, while performance monitoring requires internal expertise to align with organizational objectives.

The current thinking on automation of Travel and Entertainment (T&E) expense handling, reporting, and reimbursement is that itreduces processing costs, thereby increasing efficiency in handling T&E data. Automation streamlines tasks like receipt capture, expense report submission,approval workflows, and reimbursement, reducing manual effort and errors while improving compliance and visibility.

The web source from SAP Concur states: “T&E automation significantly reduces processing costs by streamlining expense reporting, improving accuracy, and increasing efficiency in handling T&E data.” This directly supports Option D. The other options are incorrect:

Option A: Automation minimizes, not perpetuates, manual work in modern T&E systems.

Option B: Automation strengthens controls, reducing loopholes through features like policy checks.

Option C: T&E automation is well-established, not too new to evaluate.

The IOFM APS Certification Program covers “Travel and Entertainment (T&E),” emphasizing the benefits of automation in expense management. The curriculum’s focus on “peer-tested best practices” aligns with the efficiency and cost-saving benefits of T&E automation.

Potential red flags for T&E expenses that fall outside of company policy includecharges for airline upgrades(Option I), which may indicate unauthorized luxury spending, andweekend stays(Option III), which could suggest personal travel disguised as business-related. These expenses often require additional scrutiny to ensure compliance with T&E policies.Cab fares(Option II) are typically routine and not inherently a red flag unless excessive or unsupported, making them less likely to be a policy violation compared to upgrades or weekend stays.

The web source from SAP Concur states: “Red flags in T&E expenses include charges for airline upgrades, which may violate policy on allowable travel classes, and weekend stays, which could indicate personal travel.” This supports Options I and III. Cab fares are noted as common expenses that require receipts but are not typically flagged unless unusual, per the Esker source: “Routine expenses like cab fares are less likely to be red flags compared to upgrades or extended stays.”

The IOFM APS Certification Program covers “Travel and Entertainment (T&E),” emphasizing fraud detection and policy compliance. The curriculum’s focus on “peer-tested best practices” aligns with identifying airline upgrades and weekend stays as potential red flags.

A recurring wire transfer is a payment set up to occur automatically on a regular schedule (e.g., weekly, monthly) to the same recipient organization, such as a vendor or service provider, often for fixed or variable amounts. The defining characteristic is that it ismade to the same organization each time, ensuring consistency in the recipient. The timing (Option A) and amount (Option C) may vary depending on the agreement, and the transfer is not required to use CHIPS (Option D), as wire transfers can be processed through other systems like Fedwire or SWIFT.

The web source from Tipalti states: “A recurring wire transfer is an automated payment to the same organization on a regular schedule, such as for rent or subscriptions, with amounts that may vary.” This directly supports Option B.

The IOFM APS Certification Program covers “Payments,” including wire transfers and recurring payment setups. The curriculum’s focus on “peer-tested best practices” aligns with the definition of recurring wire transfers as payments to a consistent recipient.

Compliance in T&E processes requires robust systems to ensure financial accuracy and regulatory adherence.Accurate recordkeeping(Option I) is essential to document expenses, support financial reporting, and meet IRS and SOX requirements.Secure record retention(Option II) ensures that records are stored safely to protect sensitive data and comply with retention policies (e.g., IRS rules requiring records for at least three years).Traveler location tracking(Option III) is not a standard compliance requirement for T&E, as it relates more to employee safety or logistics, not financial or regulatory compliance.

The web source from Tipalti states: “T&E compliance requires accurate recordkeeping to support expense reporting and audits, as well as secure record retention to protect data and meet regulatory retention periods.” This supports Options I and II. Traveler location tracking is not mentioned as a compliance requirement in T&E processes, per the SAP Concur source: “Compliance in T&E focuses on documentation, approvals, and data security, not employee tracking.”

The IOFM APS Certification Program covers “Travel and Entertainment (T&E),” emphasizing compliance with financial and tax regulations. The curriculum’s focus on “peer-tested best practices” aligns with accurate recordkeeping and secure retention as key compliance processes.

Data integrity refers to the assurance that data remains accurate, complete, and unaltered throughout its lifecycle, whether during storage, processing, or transmission. It ensures that data is free from unauthorized modifications or corruption. While testing for accuracy (Option D) is related, data integrity specifically focuses on preventing unauthorized changes (Option A). A digital signature (Option B) or encryption (Option C) are security measures that may support data integrity but do not define it.

The web source from Corcentric states: “Data integrity means that data remains unaltered and consistent, ensuring it is free from unauthorized modifications or errors.” This directly supports Option A.

The IOFM APS Certification Program covers “Internal Controls,” including data security and integrity in AP processes. The curriculum’s focus on “peer-tested best practices” aligns with the definition of data integrity as preventing unauthorized alterations.

Blockchain is a decentralized, distributed ledger system that records transactions across multiple computers in a secure, transparent, and tamper-resistant manner. In accounts payable, blockchain can enhance processes like invoice verification and payment tracking by providing a trusted, immutable record. The other options are incorrect: a random password generator (Option B) is unrelated to blockchain, an internal audit methodology (Option C) refers to audit processes, and an accounts payable collaborative (Option D) is not a defined term.

The web source from NetSuite explains: “Blockchain is a distributed ledger technology that records transactions in a secure, decentralized manner, offering potential applications in accounts payable for secure payment processing and invoice tracking.” This directly supports Option A.

The IOFM APS Certification Program covers “Technology and Automation,” including emerging technologies like blockchain. The curriculum’s focus on “peer-tested best practices” includes understanding technologies that enhance AP efficiency and security, confirming blockchain as a distributed ledger system.

TheTax and Regulatory Compliancetopic in the APS Certification Program covers the Streamlined Sales Tax Project (SSTP), initiated to simplify U.S. sales tax compliance across states. The SSTP has achieveda uniform exemption certificate(Item II) to standardize resale and other exemptions andrate and boundary databases(Item III) to provide accurate tax rates and jurisdictional boundaries. However, it has not fullyresolved the origin vs. destination question(Item I), as sourcing rules (origin-based vs. destination-based taxation) remain state-specific.

Item I (Resolved the origin vs. destination question): Not fully accomplished. The SSTP provides guidelines for sourcing, but states still choose between origin-based (tax based on seller’s location) and destination-based (tax based on buyer’s location) rules, creating variability.

Item II (Implemented a uniform exemption certificate): Accomplished. The SSTP developed a uniform Streamlined Sales and Use Tax Exemption Certificate, accepted by member states to simplify compliance.

Item III (Created rate and boundary databases): Accomplished. The SSTP provides centralized databases for tax rates and jurisdictional boundaries, aiding accurate tax calculations.

Option A (I only): Incorrect, as Item I is not fully accomplished.

Option B (I, II, and III): Incorrect, as Item I is not fully accomplished.

Option C (II only): Incorrect, as Item III is also accomplished.

Option D (II and III only): Correct, as Items II and III are key SSTP achievements.

Reference to IOFM APS Documents: The APS e-textbook underTax and Regulatory Compliancestates, “The Streamlined Sales Tax Project has implemented a uniform exemption certificate and created rate and boundary databases to simplify compliance, but origin vs. destination sourcing remains variable across states.” The training video notes, “SSTP’s uniform certificate and tax databases are major achievements, though sourcing rules still differ by state.”

TheInternal Controlstopic in the APS Certification Program highlights the importance of a sound records management plan for AP processes, particularly for compliance, security, and financialanalysis. A records management plan ensures that documents (e.g., invoices, vendor data) are organized, secure, and accessible, supporting legal protection, information security, and expenditure analysis.

Item I (To afford some protection against lawsuits): A records management plan ensures documentation is available to defend against legal claims, such as vendor disputes or audits, providing evidence of compliance. This is a valid reason.

Item II (To safeguard vital information): Records management protects sensitive data (e.g., vendor TINs, payment details) from loss or unauthorized access, ensuring confidentiality and compliance. This is a valid reason.

Item III (To analyze and manage expenditures): Records management enables AP to track and analyze spending patterns, supporting budgeting and cost control. This is a valid reason.

Option A (III only): Incorrect, as Items I and II are also valid reasons.

Option B (I and II only): Incorrect, as Item III is also a valid reason.

Option C (I, II, and III): Correct, as all three items are reasons for a sound records management plan.

Option D (I only): Incorrect, as Items II and III are also valid reasons.

Reference to IOFM APS Documents: The APS e-textbook underInternal Controlsstates, “A sound records management plan protects against lawsuits by maintaining auditable records, safeguards vital information like vendor data, and enables expenditure analysis for cost management.” The training video discusses records management as a critical control, citing its role in legal compliance, data security, and financial oversight.

TheVendor Master Filetopic in the APS Certification Program underscores the need for careful management of VMF changes due to the high risk of fraud.Many instances of fraud, such as redirecting payments to fraudulent accounts, are enabled by unauthorized or unverified changes to vendor data (e.g., bank account details), making rigorous controls essential.

Option A (Internal audit generally oversees this process and they must be consulted first): Incorrect. While internal audit may review VMF changes, they do not typically oversee the process directly; AP owns the VMF.

Option B (Many instances of fraud are enabled by changes in the VMF): Correct. Fraudulent changes, like altering bank details, are a common fraud vector, necessitating strict controls.

Option C (This task is generally performed by those who have little training on data entry): Incorrect. VMF changes are typically handled by trained AP staff, not untrained personnel.

Option D (Some AP software solutions have been shown to corrupt data during this process): Incorrect. There is no evidence in IOFM materials suggesting widespread software corruption issues specific to VMF changes.

Reference to IOFM APS Documents: The APS e-textbook underVendor Master Filestates, “Special care is required for VMF changes because many fraud schemes involve altering vendor data, such as bank accounts, to divert payments.” The training video emphasizes, “Fraud is often enabled by unauthorized VMF changes, requiring strict verification and audit trails.”

ThePaymentstopic in the APS Certification Program includes understanding the types of accounts involved in AP transactions, such as assets, liabilities, and expenses. Fixed assets are long-term, tangible assets used in business operations, such as furniture and fixtures, which are not intended for sale. Accounts receivable and inventory, however, are not fixed assets; they are current assets, as they are expected to be converted to cash within a year.

Item I (Accounts receivable): Accounts receivable represent money owed to the organization by customers for goods or services sold. They are classified ascurrent assets, not fixed assets, because they are short-term and liquid. This item is not a fixed asset.

Item II (Furniture and fixtures): Furniture and fixtures (e.g., desks, chairs, office equipment) are tangible, long-term assets used in business operations. They are classified asfixed assetsbecause they have a useful life exceeding one year and are not intended for sale. This item is a fixed asset.

Item III (Inventory): Inventory consists of goods held for sale or use in production. It is classified as acurrent assetbecause it is expected to be sold or used within a year. This item is not a fixed asset.

Option A (I, II, and III): Incorrect, as only II is a fixed asset; I and III are current assets.

Option B (I and II only): Incorrect, as I (accounts receivable) is not a fixed asset.

Option C (II only): Correct, as furniture and fixtures (II) are the only fixed asset among the options.

Option D (I and III only): Incorrect, as neither I (accounts receivable) nor III (inventory) are fixed assets.

Reference to IOFM APS Documents: The APS e-textbook underPaymentscovers basic accounting principles, including the classification of assets. It defines fixed assets as “tangible assets with a useful life of more than one year, such as furniture, fixtures, and equipment, used in business operations.” The text distinguishes fixed assets from current assets like accounts receivable and inventory, which are “expected to be converted to cash or used within a year.” The training video reinforces this by discussing how AP processes payments for fixed assets (e.g., capital expenditures) versus current assets (e.g., inventory purchases).

TheVendor Master Filetopic in the APS Certification Program addresses managing dynamic vendor data, such as contact information, which can change frequently. An efficient approach is toinclude a contractual requirementfor vendors to notify the organization in writing of personnel or contact changes, ensuring the VMF remains accurate without excessive manual effort.

Option A (Conduct a thorough audit semiannually): Inefficient, as semiannual audits are too infrequent for frequently changing data and resource-intensive.

Option B (Include only the vendor web address): Inefficient and risky, as websites may not provide current contact details, and manual checks are time-consuming.

Option C (Assign an individual to review weekly): Inefficient, as weekly reviews are labor-intensive and impractical for large vendor bases.

Option D (Include in the vendor contract notification of personnel changes): Correct. Contractual notification shifts responsibility to vendors, ensuring timely updates with minimal organizational effort.

Reference to IOFM APS Documents: The APS e-textbook underVendor Master Filestates, “To manage frequently changing contact information, include contractual terms requiring vendors to notify the organization of changes in writing, reducing manual updates.” The training video notes, “Efficient VMF management leverages vendor contracts to ensure timely contact updates, avoiding labor-intensive audits.”

Automated Clearing House (ACH) payments offer several benefits, including replacing paper checks (Option A), speeding up payment processing compared to checks (Option D), and reducing costs associated with manual payment methods. However, ACH does not eliminate the need for vendor verification (Option C), as organizations must still validate vendor bank details to prevent fraud and ensure accurate payments.

The web source from Tipalti states: “ACH payments reduce costs by replacing paper checks, speed up payment processing, and improve efficiency… However, proper vendor verification is still required to ensure secure transactions.” This confirms that Options A, D, and indirectly B (through overall cost reduction) are benefits, while Option C is not.

The IOFM APS Certification Program covers “Payments,” including ACH as a cost-effective payment method. The curriculum’s focus on “peer-tested best practices” emphasizes the benefits of ACH but also the importance of vendor validation, aligning with the exclusion of Option C.

A blanket purchase order (PO) is a long-term agreement with a supplier to purchase goods or services over a specified period, often used for recurring or high-volume purchases. A key limitation is that itshould not extend past a specified timeframe, as blanket POs are typically set for a defined duration (e.g., one year) to manage pricing, terms, and supplier commitments. Extending beyond this timeframe without renegotiation can lead to pricing discrepancies or supply chain issues.

The web source from NetSuite explains: “A blanket purchase order covers multiple deliveries over a set period, but it is limited by a specified timeframe to ensure pricing and terms remain valid.” This directly supports Option B. The other options are incorrect:

Option A: Blanket POs can be used for both goods and services, not just services.

Option C: Payment terms for blanket POs vary and are not restricted to same-day wire transfers.

Option D: Blanket POs are designed for multiple deliveries over time, not a specific delivery date.

The IOFM APS Certification Program covers “Invoices,” including the use of purchase orders in invoice processing. The curriculum’s focus on “peer-tested best practices” supports the understanding of blanket POs and their time-bound nature.

TheVendor Master Filetopic in the APS Certification Program emphasizes robust vendor validation to minimize fraud risk. Key practices include checking sanction lists, verifying addresses against internal locations to detect insider fraud, and confirming business registration to ensure legitimacy. All three actions (I, II, III) are standard fraud prevention measures.

Item I (Check the vendor against government sanction lists): Essential to ensure compliance with regulations (e.g., OFAC) and avoid payments to sanctioned entities.

Item II (See if the vendor’s address matches any of the organization’s locations): Critical to detect potential insider fraud, where employees create fake vendors using company addresses.

Item III (Verify the vendor’s business registration): Necessary to confirm the vendor is a legitimate, registered business, reducing the risk of payments to fraudulent entities.

Option A (I only): Incorrect, as Items II and III are also essential.

Option B (I, II, and III): Correct, as all three are key fraud prevention practices.

Option C (II only): Incorrect, as Items I and III are also essential.

Option D (I and II only): Incorrect, as Item III is also essential.

Reference to IOFM APS Documents: The APS e-textbook underVendor Master Filestates, “To minimize fraud, verify new vendors by checking sanction lists, ensuring addresses don’t match internal locations, and confirming business registration.” The training video emphasizes, “Sanction checks, address verification, and business registration are critical to prevent fraudulent vendor setups.”

TheVendor Master Filetopic in the APS Certification Program highlights the vendor master file’s role in providing data for various departments. ThePurchasingdepartment particularly benefits, as the vendor master file contains details like vendor performance, pricing, and spend history, enabling better supplier selection and negotiation.

Option A (Manufacturing): Manufacturing uses vendor data indirectly (e.g., for raw materials), but its primary focus is production, not vendor insights. Incorrect.

Option B (Purchasing): Correct. Purchasing relies on vendor master file data for supplier evaluation, contract terms, and spend analysis, directly benefiting from its insights.

Option C (Audit): Audit uses vendor data for compliance checks, but its role is verification, not strategic use of vendor insights. Less directly benefited than Purchasing.

Option D (Mailroom): The mailroom handles physical documents but does not use vendor master file insights for operational decisions. Incorrect.

Reference to IOFM APS Documents: The APS e-textbook underVendor Master Filestates, “The vendor master file provides critical insights for Purchasing, enabling spend analysis and supplier management.” The training video notes, “Purchasing benefits most from vendor master data, using it to optimize vendor relationships and costs.”

Even when using a corporate travel card, employees must keep and submit T&E receipts for several reasons. First, there may be additional out-of-pocket expenses (e.g., tips, small cash purchases) not charged to the card, requiring receipts for reimbursement (Option I). Second, corporate card statements often lack sufficient detail (e.g., itemized expenses or business purpose), necessitating receipts to meet approval and compliance requirements (Option III). However, paper receipts are not inherently easier to handle or archive than electronic ones (Option II), as modern T&E systems favor digital receipt management for efficiency and accessibility.

The web source from Esker states: “Employees must submit receipts for T&E expenses, even with corporate cards, to account for out-of-pocket expenses and to provide detailed documentation for approval, as card statements may lack itemized details.” The NetSuite source adds: “Digital receipt management is preferred over paper receipts, as it simplifies archiving and retrieval.” This supports Options I and III, while refuting Option II, as paper receipts are less efficient in modern systems.

The IOFM APS Certification Program covers “Travel and Entertainment (T&E),” emphasizing proper documentation and compliance in expense reporting. The curriculum’s focus on “peer-tested best practices” aligns with the need for receipts to document out-of-pocket expenses and provide detailed approval data, but not for paper-based archiving.

TheVendor Master Filetopic in the APS Certification Program covers vendor validation to ensure legitimacy and prevent fraud. The best way to verify a vendor’s business registration in the U.S. is tocheck the database of the Secretary of Statein the state where the vendor is registered, as this provides authoritative, public confirmation of the vendor’s legal status and registration details.

Option A (Send a letter to the vendor requesting written confirmation): Incorrect. Vendor-provided confirmation is less reliable, as it may be falsified, and is not authoritative.

Option B (Submit a request to the IRS to do a Form 1120 search): Incorrect. Form 1120 is a corporate tax return, not a business registration record, and the IRS does not provide registration verification services.

Option C (Require a sworn affidavit from the vendor’s financial institution): Incorrect. Financial institutions do not typically provide affidavits for business registration, and this is not a standard practice.

Option D (Check the database of the Secretary of State where the vendor is registered): Correct. Secretary of State databases offer verifiable, public records of business registration, the most reliable method.

Reference to IOFM APS Documents: The APS e-textbook underVendor Master Filestates, “To verify a vendor’s business registration, check the Secretary of State database in the vendor’s state of incorporation for authoritative confirmation.” The training video notes, “The best practice for validating vendor legitimacy is accessing Secretary of State records online to confirm registration details.”

International travel introduces specific concerns for accounts payable, particularly in ensuring compliance with tax regulations. A key concern is that employees must collect appropriate Value Added Tax (VAT) information (e.g., VAT invoices or receipts) to enable the organization to reclaim VAT paid on eligible expenses in foreign jurisdictions. This is critical for cost recovery and compliance with international tax laws.

The web source from Avalara states: “For international travel, AP departments must ensure employees collect proper VAT invoices to reclaim taxes, as failure to do so can result in lost savings and compliance issues.” The other options are less directly relevant:

Option A(unscrupulous vendors) is a generalization and not a primary AP concern.

Option C(time zones) affects communication but is not an AP-specific issue.

Option D(exchange rates) is a consideration for budgeting, not AP’s primary responsibility.

The IOFM APS Certification Program covers “Travel and Entertainment (T&E)” and “Tax and Regulatory Compliance,” including VAT compliance for international expenses. The curriculum’s emphasis on “peer-tested best practices” supports the importance of collecting VAT information for tax reclamation.

Wire transfers are a secure and immediate payment method typically used for high-value transactions due to their reliability and speed, despite higher transaction fees compared to other methods like ACH. Organizations commonly use wire transfers for high dollar payments, such as large vendor payments, international transactions, or critical one-time payments.

The web source from Corcentric explains: “Wire transfers are often used for high-value payments where speed and security are critical, such as large supplier payments or international transactions.” This aligns with Option B.

Direct deposit of executive pay (A)is typically handled via ACH for regular payroll.

Low dollar bulk payments (C)are more cost-effectively processed via ACH or checks.

Rent or mortgage payments (D)may use wire transfers in some cases but are not the most common use.

The IOFM APS Certification Program covers “Payments,” including payment methods like wire transfers. The curriculum’s focus on “peer-tested best practices” supports the use of wire transfers for high dollar payments due to their security and immediacy.

In the context of accounts payable and financial operations, the acronymFIFOstands forFirst In, First Out, a method commonly used in inventory management and accounting to assume that the earliest goods purchased (first in) are sold or used first (first out). This affects cost of goods sold and inventory valuation. The other options are not relevant: “Fifty Invested, Five Optioned” (Option B), “Fraud In Financial Operations” (Option C), and “Final Invoice For Offset” (Option D) are not standard terms in AP or accounting.

The web source from SAP Concur states: “FIFO, or First In, First Out, is an inventory accounting method where the earliest goods received are recorded as sold first, impacting financial reporting.” This directly supports Option A.

The IOFM APS Certification Program covers “Internal Controls,” including accounting principles like FIFO that affect financial processes. The curriculum’s focus on “peer-tested best practices” aligns with understanding FIFO as a standard method in inventory and cost accounting.

Fraudulent expense reimbursement schemes in T&E processes typically involve misrepresenting or manipulating expense reports to obtain unauthorized reimbursements. Common schemes include reporting personal expenses as business-related (Option A), forging or altering receipts (Option B), and submitting the same expense multiple times for reimbursement (Option C). Lapping schemes (Option D), which involve misappropriating funds and covering them with subsequent payments, are more associated with accounts receivable or cash management, not T&E expense reimbursements.

The web source from SAP Concur explains: “Common T&E fraud schemes include submitting personal expenses as business-related, altering or forging receipts, and requesting multiple reimbursements for the same expense.” Lapping schemes are not mentioned in the context of T&E fraud, as they pertain to different financial processes, such as diverting payments and covering them with later receipts, per the Corcentric source: “Lapping is a fraud scheme typically seen in accounts receivable, not expense reimbursements.”

The IOFM APS Certification Program covers “Travel and Entertainment (T&E),” including fraud prevention in expense reporting. The curriculum’s emphasis on “peer-tested best practices” includes identifying common T&E fraud schemes, supporting Options A, B, and C as prevalent, while excluding lapping schemes (Option D).

TheVendor Master Filetopic in the APS Certification Program emphasizes fraud prevention through robust vendor validation processes. Key practices include confirming a vendor’s physical address, checking government sanction lists (e.g., OFAC), and requiring a W-9 to verify tax identification numbers (TINs). However,verifying that vendors are bonded(i.e., insured against financial loss) is not a standard requirement for vendor fraud prevention, as it is more relevant to specific industries (e.g., construction) and not universally applicable.

Option A (Confirmation of a physical address): Verifying a physical address ensures the vendor is a legitimate entity, reducing the risk of fraudulent shell companies. This is a key practice.

Option B (Verifying that vendors are bonded): Bonding is not a standard AP requirement for fraud prevention. It may apply to certain vendors (e.g., contractors), but it is not essential for all vendor fraud prevention programs. This is the correct answer.

Option C (Checking government sanction lists): Checking lists like OFAC (Office of Foreign Assets Control) ensures compliance with regulations and prevents payments to sanctioned entities, a critical fraud prevention step. This is a key practice.

Option D (Requiring a W-9): A W-9 provides the vendor’s TIN, enabling verification with the IRS to prevent fraudulent identities and ensure tax compliance. This is a key practice.

Reference to IOFM APS Documents: The APS e-textbook underVendor Master Filelists “confirming physical addresses, checking sanction lists, and requiring W-9 forms” as essential for vendor fraud prevention. It notes that “bonding is not a universal requirement for vendor validation,though it may be relevant for specific contracts.” The training video emphasizes vendor verification processes, highlighting address checks, sanction list reviews, and W-9 requirements but not bonding.

An accountable plan, as defined by the Internal Revenue Service (IRS), is a reimbursement or allowance arrangement that meets specific requirements to ensure business expenses are properly documented and not treated as taxable income. One key requirement is that employees must adequately account for their expenses within a reasonable period. According to IRS guidelines, employees must submit expense reports or other documentation within 60 days after the expenses are incurred to meet the "reasonable period" standard.

The web source from the IRS states: “Under an accountable plan, employees must adequately account to the employer for their expenses within a reasonable period of time. The IRS considers 60 days after the expense was paid or incurred to be a reasonable period for accounting.” This directly supports Option B (60 days). The other options (120 days, 30 days, 90 days) do not align with the IRS’s specific timeframe for accounting under an accountable plan.

The IOFM APS Certification Program covers “Tax and Regulatory Compliance,” including IRS regulations related to expense reimbursements. The curriculum’s focus on “peer-tested best practices” and compliance with federal tax laws includes understanding the requirements of an accountable plan, such as the 60-day rule for expense accounting.

A substitute check, created under the Check Clearing for the 21st Century Act (Check 21), is a paper reproduction of the front and back of an original check, legally equivalent to the original for processing purposes. It is also known as animage replacement document (IRD), as it replaces the original check with a digital image-based substitute. This facilitates faster check clearing through electronic processing.

The web source from NetSuite states: “A substitute check, also known as an image replacement document (IRD), is a paper copy of the front and back of a check, legally equivalent to the original, created under Check 21.” This directly supports Option D. The other options are incorrect:

Electronic conversion order (A)is not a recognized term.

Surrogate financial instrument (B)is not a standard term for substitute checks.

Negotiated bank draft (C)refers to a different financial instrument.

The IOFM APS Certification Program covers “Payments,” including check processing and Check 21 regulations. The curriculum’s focus on “peer-tested best practices” aligns with the definition of a substitute check as an image replacement document.

In the context of technology and accounts payable, the acronymASPstands forApplication Service Provider, which refers to a third-party provider that delivers software applications over the internet, typically on a subscription basis. This is distinct from automated secure processing (Option A), accounting standards protocol (Option C), or accrual statement period (Option D), which are not standard terms in this context.

The web source from NetSuite states: “An Application Service Provider (ASP) delivers software applications over the internet, allowing businesses to access tools like AP automation without on-premises infrastructure.” This directly supports Option B.

The IOFM APS Certification Program covers “Technology and Automation,” including cloud-based and hosted software solutions like those provided by ASPs. The curriculum’s focus on “peer-tested best practices” aligns with understanding ASPs as a delivery model for AP tools.

TheTax and Regulatory Compliancetopic in the APS Certification Program covers IRS Form 1099 reporting requirements for payments to U.S. unincorporated service providers (e.g., independent contractors, freelancers). Payments for services totaling$600 or morein a calendar year must be reported on Form 1099-NEC (Nonemployee Compensation), ensuring the IRS can track income for tax purposes.

Option A ($600): Correct. The IRS requires Form 1099-NEC for payments of $600 or more to unincorporated U.S. service providers, such as individuals or partnerships, for services rendered.

Option B ($1,000): Incorrect. The $600 threshold applies, not $1,000.

Option C ($500): Incorrect. The threshold is $600, not $500.

Option D ($300): Incorrect. The threshold is $600, not $300.

Reference to IOFM APS Documents: The APS e-textbook underTax and Regulatory Compliancestates, “Payments of $600 or more to U.S. unincorporated service providers must be reported on Form 1099-NEC, per IRS regulations.” TheMaster Guide to Form 1099 Compliancespecifies, “The $600 threshold applies to nonemployee compensation paid to individuals, sole proprietors, or partnerships, requiring a 1099-NEC filing.” The training video reinforces this, noting, “AP ensures 1099-NEC forms are issued for payments of $600 or more to track contractor income.”

TheVendor Master Filetopic in the IOFM APS Certification Program emphasizes the strategic role of accounts payable (AP) specialists in managing vendor data and relationships, which directly benefits the organization. AP specialists contribute by ensuring timely payments to meet commitments, communicating operational challenges to management, and fostering positive supplier relationships, all of which enhance organizational efficiency and reputation.

Item I (Meet the organization’s commitments): AP specialists ensure invoices areprocessed and paid on time, meeting the organization’s financial obligations to vendors. This supports trust and operational continuity.

Item II (Communicate to management barriers to performance): AP specialists identify issues such as process bottlenecks, system inefficiencies, or vendor disputes and report them to management, enabling proactive solutions.

Item III (Maintain positive relationships with suppliers): By managing the vendor master file, resolving disputes, and ensuring timely payments, AP specialists foster strong supplier relationships, which can lead to better terms and reliability.

Option A (II and III only): Incorrect, as it excludes I, which is a core AP function.

Option B (I and III only): Incorrect, as it excludes II, which is also a key responsibility.

Option C (I, II, and III): Correct, as all three items represent ways AP specialists benefit the organization.

Option D (I and II only): Incorrect, as it excludes III, which is critical for vendor management.

Reference to IOFM APS Documents: The APS e-textbook underVendor Master Filestates, “AP specialists add value by ensuring accurate vendor data, timely payments to meet organizational commitments, and strong supplier relationships.” It also notes that “communicating barriers to performance, such as delays or system issues, helps management optimize AP processes.” The training video reinforces that AP’s role extends beyond transactions to strategic contributions, including supplier trust and process improvement.

TheInternal Controlstopic in the APS Certification Program addresses fraud prevention, referencing the Association of Certified Fraud Examiners (ACFE) for fraud trends. According to the ACFE’s Report to the Nations,asset misappropriationis the most common type of occupational fraud, involving schemes like theft of cash, inventory, or other assets. It is more frequent than corruption, financial misstatement, or intellectual property fraud due to its simplicity and accessibility in roles like AP.

Option A (Asset misappropriation): Correct. ACFE data consistently shows asset misappropriation as the most common fraud scheme, accounting for over 80% of cases, due to its prevalence in roles with access to funds or assets.

Option B (Intellectual property fraud): Intellectual property fraud is less common, as it requires specialized knowledge and access, and is not a primary AP concern. This is incorrect.

**Option C (Corruption (энер

Answer: A

TheInternal Controlstopic in the APS Certification Program addresses fraud prevention, referencing the Association of Certified Fraud Examiners (ACFE) for fraud trends. According to the ACFE’sReport to the Nations,asset misappropriationis the most common type of occupational fraud, involving schemes like theft of cash, inventory, or other assets. It is more frequent than corruption, financial misstatement, or intellectual property fraud due to its simplicity and accessibility in roles like accounts payable (AP).

Option A (Asset misappropriation): Correct. The ACFE’sReport to the Nations(2022 edition, as referenced in IOFM materials) states that asset misappropriation accounts for approximately 86% of occupational fraud cases, making it the most common scheme. Examples include stealing cash, falsifying expense reports, or misusing company assets, which are prevalent in AP due to access to payments and vendor data.

Option B (Intellectual property fraud): Intellectual property fraud, such as theft of trade secrets, is less common (less than 5% of cases per ACFE) and typically involves specialized roles, not AP. This is incorrect.

Option C (Corruption (bribery)): Corruption, including bribery and kickbacks, accounts for about 38% of cases (often overlapping with other schemes), but is less frequent than asset misappropriation. This is incorrect.

Option D (Financial misstatement): Financial misstatement, such as falsifying financial reports, is the least common (around 10% of cases) but often involves the highest financial impact. This is incorrect.

Reference to IOFM APS Documents: The APS e-textbook underInternal Controlscites the ACFE’sReport to the Nations, stating, “Asset misappropriation is the most common fraud scheme, comprising over 80% of cases, due to its ease of execution in roles like AP.” The training videodiscusses fraud risks in AP, emphasizing that “per the ACFE, asset misappropriation, such as cash theft or fraudulent payments, is the most frequent fraud type.”