In commercial and financial operations, fictitious supplier accounts are usually abused to cover up improper transactions such as fraud, corruption, or money laundering. The following are typical scenarios and operating procedures in which such accounts may be exploited： --- ### **1. False purchase or service payment** -**Operation method**: Employees or insiders create fictitious suppliers, forge purchase orders, invoices, or service contracts, and after passing the company's approval process, the funds are paid to the controlled account. -**Concealment**: The “services” or “goods” of the fictitious supplier do not exist, but the illusion of legal transactions is created through false documents (such as invoices and acceptance slips). -**Case **: A purchasing manager set up a shell company to fictionalize the demand for purchasing equipment and transfer funds to his own account. --- ### **2. Inflate costs or transfer profits** -**Operation method**: Increase procurement costs through fictitious suppliers and reduce the company's reported profits, thereby evading taxes or transferring funds to related parties. -**Concealment**: In the financial statements, inflated costs may be disguised as normal business expenses (such as advertising and consulting fees). --- ### **3. Channels of kickback or bribery** -**Operation method**: The supplier colluded with the company's internal personnel to fabricate the transaction to pay the rebate. For example, a supplier can invoice and return part of the funds to the decision maker. -**Concealment**: Funds are laundered through multi-layer transfers or offshore accounts, and the direct connection is cut off. --- ### **4. Money laundering** -**Operation method**: Inject illegal income (such as embezzlement) into the company's account through the “legal transaction” of a fictitious supplier, and then withdraw it in the form of “income”. -**Concealment**: Use complex transaction structures (such as cross-border payments, multi-level suppliers) to blur the flow of funds. --- ### **5. Bypass budget or audit controls** -**Operation method**: Split expenditures that exceed the budget (such as personal consumption by executives) into the names of fictitious suppliers, and distribute payments to avoid censorship. -**Concealment**: Make multiple payments in small amounts to avoid triggering audit thresholds. --- ### **6. Embezzlement of assets** -**Operation method**: Transfer company assets (such as inventory and equipment) to fictitious suppliers in the name of “scrap” or “sell at a low price”, and then resell them for profit. -**Concealment**: Take advantage of loopholes in asset inventory or falsify disposal records. --- ###**How to identify and prevent? ** 1. **Internal control measures**： -Separation of responsibilities: different personnel are responsible for procurement, approval, and payment responsibilities. -Supplier due diligence: verify supplier qualifications (such as address and tax registration number). -Three-party matching: check the consistency of purchase orders, receipt records, and invoices. 2. **Data analysis tools**： -Monitor abnormal transactions (such as frequent small payments, sudden large transactions by new suppliers). 3. **Audit method**： -Regular unannounced audits of supplier lists and transaction records. -Check the relevance of the bank account to the supplier. --- The abuse of fictitious suppliers often relies on loopholes in internal controls. The key to compliance lies in establishing transparent processes, strengthening supervision mechanisms, and timely identification of anomalies through technical means.