An auditor suspects that certain client employees are ordering merchandise for themselves over the Internet without recording the purchase or receipt of the merchandise. When vendors' invoices arrive, one of the employees approves the invoices for payment. After the invoices are paid, the employee destroys the invoices and the related vouchers. In gathering evidence regarding the fraud, the auditor most likely would select items for testing from the file of all: Multiple Choice Cash disbursements. Approved vouchers. Receiving reports. Vendors' invoices.
Q: If operations for an accounting period resulted in revenue earned of $200,000 and expenses incurred…
A: Net income is calculated after deducting all the expenses from the total revenue. Total expenses…
Q: In 2021, Russell Rogers is single with net investment income of $18,000 and modified adjusted gross…
A: Answer 4:- Option E is correct None of the above. Net investment income tax for the year is $684.…
Q: d. ratio analysis. B. A firm has liabilities of P30,000 and owner's capital of P90,000. The…
A: The accounting equation states that assets equals to sum of liabilities and shareholders equity.
Q: Bonita Company expects to have a cash balance of $52,200 on January 1, 2022. Relevant monthly budget…
A: The cash budget is prepared to record cash receipts and cash payments to be made during the period.…
Q: 00 of AMT income before the annual exemption. Round any computations and final answer to the…
A: The answer has been mentioned below.
Q: Each Tuesday, Ryan Airlines reduces its one-way ticket from Fort Wayne to Chicago from $136 to $25.…
A: Discount is the amount which is offered by the selller to the buyer to increase revenue. It is…
Q: Which of the following types of messages might the Active Auditor display? Question 9 options:…
A: Solution: Following type of messages might the active auditor displays: 1. Warnings that indicate…
Q: COSTING SYSTEMS Arbour Tools Ltd, manufacturer of garden tools, uses job costing to assign costs to…
A: Cost of goods manufactured = Beginning WIP + direct materials + direct labor + manufacturing…
Q: Erica is a citizen of a foreign country and works as an employee for Fco, a foreign corporation that…
A: Income tax is a sort of tax levied by governments on the earnings of enterprises and persons under…
Q: Realization Test Principle/Theory.
A: Accounting is based on some principles, and to maintain uniformity, everyone must follow accounting…
Q: What is the name of the system of accounting for recording transactions, based on recording…
A: Solution: Double entry accounting system is a system of accounting that ensures that every financial…
Q: 12. The Thomas Company has two service departments and two operating departments. The following data…
A: Cost allocation is a method of delivering relief to the cost centers of a common service…
Q: On January 1, 2020, Dopey Enterprises, Inc. developed a new machine that reduces the time required…
A: On January 1, 2020 Dopey Enterprises, Inc. developed a new machine that reduces the time required to…
Q: a CFE was hired by B Industrial to investigate suspected fraud. the CFE started analyzing the…
A: Formulas: Current ratio = Current assets / Current liabilities Quick ratio = Quick assets / Current…
Q: 9. How much impairment loss is to be recorded by Frozen relating to the non-current assets held for…
A: As per our protocol we provide solution to the only one question kindly resubmit the remaining…
Q: 1. Calculate the capacity cost rate for the checking account process. Round your answers to the…
A: 1. Capacity cost rate = Total resources / Total check processing hours = 460,000 / 25,000 = 18.4…
Q: Independently considering each of the following statements regarding W-4 (Employee's Withholding…
A: The answer is stated below:
Q: The average price of a gallon of gas In 2018 Increased $0.30 (12.4 percent) from $242 in 2017 to…
A: Since you have posted a question with multiple sub-parts, we will do the first three sub-parts for…
Q: Accounting systems are designed to show the increases and decreases in each accounting equation…
A: Solution: A account contains a record of business transactions. It is a separate record within the…
Q: b. How do you think accounting irregularities affect the pricing of corporate stock in general? From…
A: ACCOUNTING IRREGULARITIES: It is an entry or statement that does not conform to the normal rules of…
Q: On December 31, 2021, Sleepy Corporation purchased for P40,000,000 cash all of the outstanding…
A: Goodwill is the amount of the difference between the consideration paid for an acquisition and net…
Q: Lydia Mila is engaged in the sale of chicken in various forms. The following are Lydia Mila's sales:…
A: Here discuss about the live Poultry items which are subject to the Value added tax exemption in…
Q: В. Doy, Rey, May and Fay are partners with capitals of P 22,000, P 20,600, P 27,400 and P 18,000…
A: At the time of liquidation of the partnership firm, available cash should be given to the partners…
Q: What is income?
A: Income is the excess of Revenue over Expenses for the period. Income is generated on account of…
Q: 4.20 Dennis Goods Company prepared the following preliminary forecast concerning product G for the…
A: Introduction: Operating income is an accounting measure that measures the amount of profit made by a…
Q: Tyler Company uses a weighted average process costing system. Material is added at the start of…
A: Ending WIP is the units that are yet to be completely produced at the end of the period.
Q: A Corporation owns 20% of C Corporation. C has current earnings and profits of $40,000. C…
A: Tax consequences means tax determination of the members who are managing shall engaged or…
Q: The Heart Co. has just completed a 4-year contract to which the following relate: Labor and…
A: As per IFRS 15, Revenue from contract with customer Total contract cost includes contract…
Q: O No, because it represents debt.
A: IOU in money shows the existence of debt which represents the informal written agreement that is a…
Q: cross-purchase buy-sell agreement between the two sisters
A: Business techniques are important for the business and help in developing and optimizing solutions…
Q: Instruction: Prepare a statement of Liquidation and the required journal entries for each of the…
A: Tik, Tak and Toe are liquidating their partnership on 31st December, 2019. Liquidation of…
Q: Regasco Gas Co. grants its customers one reward point per P100 sales. Each point is equivalent to…
A: The company may provide gift and reward while making sales to the customers and the customers then…
Q: Montana manufactures bookcases for colleges and universities to use in dorm rooms. Each bookcase…
A: Solution: Budgeted sales revenue for a month can be determined using formula = Budgeted Sales Units…
Q: I need help with question 34 -38 if you can
A: Disclaimer : “Since you have posted a question with multiple sub-parts, we will solve first three…
Q: In the eBook, NetSolutions calls their revenue earned from providing services __________________.…
A: Solution: Service revenue are the revenue earned by a business for providing services. It can be…
Q: Suppose you are a beneficiary designated to immediately receive ₱9201 each year for 7 years, earning…
A: in the given question the first payment will be received today. therefore, future value can be…
Q: A compound journal entry is Multiple Choice A journal entry that has three or more debits and three…
A: Introduction: Writing a general journal entry is another technique of visualizing business…
Q: t the beginning of current year, Jazz Company has an The toy train division is regarded as a cash…
A:
Q: Given the following: $100 $90 $35 $47 $12 $25 $13 Total Assets 1/1/13 12/31/13 Total Assets 1/1/13…
A: Owners' equity indicates the investment balance of the business. It increases due to additional…
Q: ABC Corporation has recently completed a project to reduce total production costs by 5%. Net income…
A: Part A: Cost of Quality: Cost of quality (COQ) is defined as a methodology that allows an…
Q: 4. Fly Away Air Lines (a resident international carrier) has the following data for the current…
A: International – Carrier. — An international carrier doing business in the Philippines shall pay a…
Q: No.2 siven the facts in the question above, what is the figure for the bank balance to be reported…
A: Introduction: When you make a payment, credit is applied to your account. When you return something…
Q: No.2 Given the facts in the question above, what is the figure for the bank balance to be reported…
A: The bank reconciliation statement is prepared to equate the balances of cash book and passbook with…
Q: 2-2 2. Using your answer to Requirement 1, assume that Reshier Company is considering dropping any…
A: Contribution margin is the difference between sales and variable costs where as Product margin is…
Q: 19. Shaquille transfers two assets to a newly-created corporation. The first asset has an adjusted…
A: When an investment or object is sold at a higher price than it was originally paid, a recognized…
Q: Task 2: Journalizing using Periodic Inventory System Direction: 1. Prepare journal entries to…
A:
Q: b. A reply from a receivable confirmation letter received from the customer through the client is…
A: Confirmation letters are part of audit procedure and are sent to outside parties to confirm certain…
Q: 9. A firm had owner's capital of P150,000 in 2013 and P187,500 in 2013. The increase in owner's…
A: Increase in owner's capital = P187,500 - P150,000 = P37,500
Q: whether to pursue a restricted or relaxed current asset investment policy. The firm's annual sales…
A: asset turn over ratio is calculated by taking net sales in the numerator and taking total assets in…
Q: From the following information, calculate - 1. Trade receivables turnover ratio 2. Average…
A: Ratio analysis helps to analyze the financial statements of the company. The management can take…
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
- Provide an appropriate response based on the following scenarios. Assume that the accounting clerk posts a customer’s payment for the wrong amount, giving the customer credit for less than he or she actually paid. How will this error be detected? How might this error have been prevented? Assume that the employee who opens the mail steals a customer payment. How will this theft be detected? How might this theft have been prevented?Allison Everhart, an employee in accounts payable, believes she can run a fictitious invoice through the accounts payable system and collect the money. She knows payments are subject to an audit. Which account would be the best place to hide the fraud?a. Inventory.b. Wage expense.c. Consulting service expense.d. Property tax expense.1. What does it mean to say that internal control has limitations and what are these limitations? 2. Provide an appropriate response based on the following scenarios. Assume that the accounting clerk posts a customer’s payment for the wrong amount, giving the customer credit for less than he or she actually paid. How will this error be detected? How might this error have been prevented? Assume that the employee who opens the mail steals a customer payment. How will this theft be detected? How might this theft have been prevented? 3. What is petty cash and what purpose(s) does it serve? 4. What types of controls should be in place to make sure people in the office don't just take from petty cash (for their own personal use) whenever they feel like it? In your opinion, what is an appropriate amount to have in petty cash? 5. Prepare the necessary journal entries for each of the following: (a) On March 1, issued a check to establish a petty cash fund of $1,410 (b)…
- A fraudulent sales order was prepared by an order entry clerk in an attempt to steal merchandise from an organization. This fraud would most likely be detected by: Question 6 options: Using pre-numbered sales orders. Verifying that the sales order has been prepared correctly. Requiring that all sales orders by supported by an approved customer purchase order. Proper segregation of duties.All-Around Sound Co. discovered a fraud whereby one of its front office administrative employees used company funds to purchase goods such as computers, digital cameras, and other electronic items for her own use. The fraud was discovered when employees noticed an increase in the frequency of deliveries from vendors and the use of unusual vendors. After some investigation, it was discovered that the employee would alter thedescription or change the quantity on an invoice in order to explain the cost on the bill.What general internal control weaknesses contributed to this fraud?During the confirmation of accounts receivable, an auditor receives a confirmation via the client’s fax machine. Which of the following actions should the auditor take?a. Not accept the confirmation and select another customer’s balance to confirm.b. Not accept the confirmation and treat it as an exception.c. Accept the confirmation and file it in the working papers.d. Accept the confirmation but verify the source and content through a telephone call to the respondent.
- Based on an assessment of audit risk, the auditors are concerned with the following two risks: The risk that that the client might be making duplicate payments to vendors. The risk that the client’s accounting clerk might be making unauthorized payments to himself. Required: a. Assuming that the client has a manual accounting system, describe how the auditors can design a test to identify the duplicate payments and unauthorized payments. b. Assuming that the client has an IT accounting system, describe how the auditors might use data analytic software to design a test to identify the duplicate payments and the unauthorized payments. c. Describe the advantages of using data analytics software to identify unusual transactions or entries.ased on an assessment of audit risk, the auditors are concerned with the following two risks: The risk that that the client might be making duplicate payments to vendors. The risk that the client’s accounting clerk might be making unauthorized payments to himself. Required: a. Assuming that the client has a manual accounting system, describe how the auditors can design a test to identify the duplicate payments and unauthorized payments. b. Assuming that the client has an IT accounting system, describe how the auditors might use data analytic software to design a test to identify the duplicate payments and the unauthorized payments. b. Assuming that the client has an IT accounting system, describe how the auditors might use data analytic software to design a test to identify the duplicate payments and the unauthorized payments.For each of the following three independent cases of employee fraud, recommend how to prevent similar problems in the future: Case A: Due to abnormal inventory shrinkage in the audiovisual department at a retail chain store, internal auditors conducted an in- depth audit of the department. They learned that a customer frequently bought large numbers of small electronic components from a certain cashier. The auditors discovered that they had colluded to steal electronic components by not recording the sale of items the customer took from the store. Case B: During an unannounced audit, auditors discovered a payroll fraud when they distributed paychecks instead of department supervisors. When the auditors investigated an unclaimed paycheck, they discovered that the employee quit four months previously after arguing with the supervisor. The supervisor continued to turn in a time card for the employee and pocketed his check. Case C: Auditors discovered an accounts payable clerk who made…
- Looking for Evidence of Fraud. Wen-Li is an internal auditor for Main ElectricalSupply in Springfield, Illinois. During her audit, she came across the invoice shown inExhibit D.60.1. The invoice is in almost pristine condition with few marks and no creases.The invoice was properly filed in a vendor folder marked Best Office Supply, which is on theapproved vendor list, but the vendor review sheet, which is required to place a vendor on theapproved vendor list, is missing from the file.Three other invoices were in the file: June 14, 2016 Invoice 0076 $238.99 July 17, 2016 Invoice 0081 324.55 August 16, 2016 Invoice 0085 386.82 Required:a. Is this a legitimate invoice? What information might lead you to suspect that this invoicemay indicate a fraud?b. What type(s) of fraud might this indicate?1. A threat to the expenditure cycle that involves an employee creating and approving fictitious purchase orders is known as: A. Inventory theft B. Unauthorized access C. Check tampering D. Billing schemes 2. Purchase orders are used to initiate a payment in the disbursement cycle. True or False 3.Vendor audits are conducted to address the threat of unauthorized access in the disbursement cycle. True or falseParagon Tech Company, a communications equipment manufacturer, recently fell victim to a fraud scheme developed by one of its employees. To understand the scheme, it is necessary to review Paragon Tech’s procedures for the purchase of services. The purchasing agent is responsible for ordering services (such as repairs to a photocopy machine or office cleaning) after receiving a service requisition from an authorizedmanager. However, because no tangible goods are delivered, a receiving report is not prepared. When the Accounting Department receives an invoice billing Paragon Tech for a service call, the accounts payable clerk calls the manager who requested the service in order to verify that it was performed.The fraud scheme involves Mae Jansma, the manager of plant and facilities. Mae arranged for her uncle’s company, Radiate Systems, to be placed on Paragon Tech’s approved vendor list. Mae did not disclose the family relationship. On several occasions, Mae would submit a requisition…