ACC3010week5_casestudy_robertsg

Subject: Accounting Information System ETHICS, FRAUD, AND INTERNAL CONTROL Stated Problem: EXPENSE ACCOUNT FRAUD While auditing the financial statements of Petty Cor-poration, the certified public accounting firm of TrueBlue and Smith discovered that its client’s legal expenses account was abnormally high. Further investigation of the records indicated the following:•Since the beginning of the year, several disbursements totaling $15,000 had been made to the law firm of Swindle, Fox, and Kreip.•Swindle, Fox, and Kreip were not Petty Corporation's attorneys. A review of the canceled checks showed that they had been written and approved by Mary Boghas, the cash disbursements clerk. Boghas’s other duties included performing the end-of-month bank reconciliation. Subsequent investigation revealed that Swindle,Fox, and Kreip are representing Mary Boghas in an unrelated embezzlement case in which she is the defendant. The checks had been written in payment of her personal legal fees.…

Discussion Question 37:  Explain why Benford's Law is useful to auditors in the detection of fraud. (write a one page response for each question):

Accounting You are auditing the financial statements of Holly’s Happenin’ Hula Hoops Club (4H Club). Unbeknownst to you as the auditor, there is a fraud being committed related to the inventory account. For the fraud described below, specifically list a) the assertion about the inventory account that is violated, b) a control procedure the client should have had in place that could have potentially prevented the fraud, and c) an audit procedure that you would likely perform during the audit of inventory that would detect the fraud. Each month, an employee in the receiving department submits a fictitious receiving report to accounting. A few days later, he sends the 4H Club an invoice for the quantity of goods ordered from a small company he owns and operates. The invoice is always paid when the accounts payable clerk matches the receiving report with the vendor’s invoice

Assignment 1: Individual research/essay You are a newly hired fraud examiner. You have been asked to write a preliminary report on the Paving Company Case scenario based on the information presented in Units 1 to 4 and findings from your additional research.  Your report should not exceed 2,000 words. The word limit is not inclusive of the bibliography and cover page.  In your response, the following points must be addressed fully: a)      Determine the type of fraud committed and describe the symptoms of fraud that might be evident to an investigator.  b)      As discussed in units 1 to 4, all frauds involve key elements. Identify and describe using examples the elements of the Sharp's fraud.  c)       In the scenario, Sharp’s employer has been putting more emphasis on controlling costs for the various businesses. With the slowing of overall spending in the construction sector, Travolta had ordered managers to closely monitor expenses. He had sold several companies and has given vice…

Answer the following from Chapter 7 of the textbook (write a one page response for each question):  Discussion Question 37:  Explain why Benford's Law is useful to auditors in the detection of fraud.

Item A.  Fraud Facts: Susan Green has worked for ABC Company (“ABC”) as the executive secretary in the administrative department for over 10 years. Her apparent integrity and dedication to her work has earned her the reputation of being an outstanding employee and has resulted in increased responsibilities.  Her present responsibilities include making arrangements for outside feasibility studies, maintaining client files, working with outside marketing consultants, initiating the payment process, and notifying the accounting department of all openings or closings of vendor accounts.  During Susan’s first five years of employment, ABC subcontracted all of its feasibility and marketing studies through Adams and Co. This relationship was subsequently terminated because Adams and Co. merged with a larger, more expensive consulting group.  After termination of Adams and Co., Susan and her supervisor selected a new firm to conduct ABC’s market research.  However, Susan never informed the…

# 18: In 2001, the Enron scandal rocked the world of accounting. What is the name of Enron's external auditor, who failed to detect rampant fraud at Enron and was indicted for obstruction of justice for shredding documents related to the audit? A. Coopers & Lybrand B. Grant Thornton C. Pricewaterhouse D. Arthur Andersen a och Bola Josi to ipval txoa silt at bume

Which of the following is NOT an example of an opportunity to commit fraud in the accounting information system? a. The need to sell confidential information from the database for cash to pay for his medical bills   b. User names and passwords of most employees are stored in a shared Google document file   c. The employee's discovery that passwords are not required to enter any modules in the accounting information system   d. Supervisors are not required to approve transactions entered into by their staff in the accounting system

Question #66:  Lamar LLC is in the process of updating its revenues and receivables systems with the implementation of new accounting software. James Loden, Inc. is an independent information technology consultant who is assisting Tamar with the project. James has developed the following checklist containing internal control points that the company should consider in this new implementation: Is the sales department separate from the credit office and the IT department? Are all collections from customers received in the form of checks? Is it appropriate to program the system for general authorization of certain sales, within given limits? Are product quantities monitored regularly? Required: In a two (2) page response, describe the control purpose for each point presented in the case.

ESB. ACCOUNTING CONNECTION Careful scrutiny of accounting records and financial statements can lead to the discovery of fraud or embezzlement. Each of the situations that follow may indicate a breakdown in internal control. Indicate the nature of the pos- sible fraud or embezzlement in each of these situations. 1. Wages expense for a branch office was 30 percent higher in 2014 than in 2013, even though the office was authorized to employ only the same four employees and raises were only 5 percent in 2014. 2. Sales returns and allowances increased from 5 percent to 20 percent of sales in the first two months of 2014, after record sales in 2013 resulted in large bonuses for the sales staff. 3. Gross margin decreased from 40 percent of net sales in 2013 to 20 percent in 2014, even though there was no change in pricing. Ending inventory was 50 percent less at the end of 2014 than it was at the beginning of the year. There is no immediate explanation for the decrease in inventory. 4. A…

25-The manager of ABC SAOG is presently out of country for business purpose. The company has produced photocopies of fixed deposits receipts. The original fixed deposit receipts were kept in the locked iron safe of the manager. As an auditor what step can be taken?   a-Withdraw from the audit if legally permissible b-Mention the case in the auditors opinion c-Obtain external confirmation from bank manager d-Modify the audit report

How can fraud be prevented in the making use of accounting information systems? How do ethics and internal control play key roles in reporting misstated financial statements? (Accounting Information System Tenth Edition by James Hall chapter 3)

Question 6 Which of the following substantive procedures would most likely help an auditor determine whether accounts payable have been misstated?     Examining reported purchases orders that appear to be too low.     Reviewing disbursements subsequent to year end to determine if liabilities have been properly recorded on the year-end balance sheet.     Searching customer returned goods that were not reported as returns.     None of the answers provided

Please answer with reason for all why the option is correct and why the other options are incorrectPlease answer correct otherwise skip it     During the external audit of Starbright Company, the external auditor has noted that the company has an extremely high turnover of employees. During a recent meeting, Starbright management has advised that the treasurer has recently left to take another position with a different company, and has asked the senior audit manager assigned to the audit to sign checks in an emergency capacity until a suitable replacement has been found. Which of the choices below best describe the problem with this situation? A. The audit manager may take advantage of this situation to write other checks for personal gain, and there may be no internal controls to detect this. B. The CPA authorizing disbursements of client funds, even in an emergency capacity may represent a threat to independence as the auditor is exercising authority on behalf of a client. C. The…

27. An audit firm has been asked by a client to attend a meeting between the client and its bank where a new bank loan application is to be discussed. According to the Code of Professional Ethics for Accountants, what type of threat to objectivity will be created if the auditor attends this meeting? a. Self interest threat b. Intimidation threat c. None of the options d. Self review threat

V4. Hayden Corporation uses an enterprise resource planning (ERP) system. In their audit of receivables and revenues, the auditors have identified the following data elements in the corporation’s database that may be used for data analytics applications: Customer balance Customer credit limit and credit rating Customer total annual sales Customer purchases by date Customer returns by date Customer name Customer shipping address Required: a. Describe two data analytic applications that might be used to audit the existence of receivables and occurrence of sales. b. Describe one data analytic application that might be used to audit the valuation of receivables.

Case 1: Fraud examination Karen, a friend of yours, recently started her own business, The Bike and Boulder Company (B&B). B&B specializes in the sales of mountain bikes and rock- climbing equipment. Karen is putting the finishing touches on her company policies and procedures. She knows you are taking a fraud class and asks you to review what she has completed thus far. You quickly notice that Karen has neglected to address fraud and fraud prevention in her policies and procedure. What policies and procedures would you suggest Karen implement to prevent and detect fraud at B&B?