ACC 556
July 9, 2012
Instructor Jill Datema
Financial Statement Fraud Schemes
Competition is often about the bottom distinction and how good the number is comp atomic number 18d to others. Senior executives sustain goals and projections as their target. When those goals and projections are not in line with the true numbers, some depart rely on achieving their goals by ignoring rules. The news has been littered with stories of faker and deception in recent years, which all began with corruption of some(prenominal) large companies. In the case of Apollo Shoes, there are some definite errors and some shady deals going on. This brief go out review possible financial statement fraud schemes and let out evidence to determine fraud.
Fictitious Revenue
The accounts receivable audit interrogation of controls shows numerous issues within the cycle. Fictitious revenue fraud was act from a sale made to Mall-Warts in the amount of $5,765,082. more often than not accepted accounting principles (GAAP) states revenue recognition can yet occur when an arrangement must exists, delivery has occurred, price is ameliorate and determinable, and collectability is reasonably assured. Two of the four standards have been violated; reality of an arrangement and collectability.
On the account verification, the customer noted they organize Apollo Shoes they went into bankruptcy proceedings on November 3rd. A procure order for the shipment was not found, credit approval should have been denied, and Mall-Warts would not have ordered size 23 shoes. This is a classic example of boosting revenues and getting rid of aging inventory.
hide Liabilities and Expenses
Omitting expenses is a common error that is made. However, this does not change the event that these omissions create fraudulent financial statements. In the audit counteract for unrecorded liabilities, an invoice for inventory in the amount of $8,434,889 was not recorded until the following year. However, the shipment was...If you want to get a full essay, order it on our website: Orderessay
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