Ahold

In this case, there are several conspirators who is involved in the fraud receiving punishment from either SEC or federal government. Robert Levin, the AMRE executive and major stockholder, and Dennie D.Brown, the company’s chief accounting officer, were subject to the punishment in the form of a huge amount of fine by the SEC and the federal government. This punishment came from reasons. After AMRE going public, the company have the obligation to publish its financial reports but its performance did not meet expectation. The investigation by SEC shows that Robert took the first step of this scam, fearing the sharp drop of AMRE’s stock price because of the poor performance of company. He abetted Brown, to practice three main schemes to present a false appearance of profitable and pleasant financial reports. Firstly, they instructed Walter W.Richardson, the company’s vice president of data processing, to enter fictitious unset leads in the lead bank and they originally deferred the advertising cost mutiplying “cost per lead” and “unset leads” amount, so that they deferred a portion of its advertising costs in an asset account. The capitalizing of advertising expenses allowed them to inflate the net income for the first quarter of fiscal 1988. Secondly, at the end of the third and fourth quarters of fiscal 1988, they added fictitious inventory to AMRE’s ending inventory records, and prepared bogus inventory count sheets for the auditors. Thirdly, they overstated the percentage

The Molex Corporation is an electronic connector manufacturing firm, which is based in Illinois. This company is facing a financial reporting problem in which the financial statements were overstated. Joe King ,the CEO of the company, was appointed in July of 2001, and was responsible for managing and inventory control, among other very important duties. Diane Bullock was hired in 2003, to replace the previous CFO. Both Bullock and King were being accused of what? by the external auditors, Deloitte & Touche, for not disclosing an 8 million pre-tax inventory valuation error.

Purchase/payables/payment system: Based on a sample of 75 cash disbursements we concluded that the controls were operating effectively. Cash disbursements were made for purchases of raw materials from suppliers in Taiwan, and traced back to be properly converted to U.S. dollars and classified to the appropriate accounts.

Operations is separate from the accounting department. The employees in operations handle promoting the products. Also, Operations is in charge of making the products. The company’s accounting system is handled in-house by the cashier and the bookkeeper and by the accounting firm hired to handle the businesses’ financial reporting. The cashier handles all sales through the register. The register is balanced against the drawer each night by the bookkeeper and a deposit made the same day. The bookkeeper gives the accountant the drawer receipts and bank receipts for journal entries and later reports. The accountant checks all cash received and payments made against bank statements and collected paperwork. There is not a single person assigned to do all duties.

It follows a strong internal control system for cash. A separate person is appointed to approve all purchases, payroll and any disbursement of cash. At the end of each month company prepares bank reconciliation statement to reconcile cash book balance and bank statement balance. Company keeps proper inventory record system. All these prevent frauds and ensure smooth functioning of the business.

* Documents used: customer order, sales order, shipping document, sales invoice, sales journal, remittance advice, bank deposit list, cash receipts jornal, credit memo, sales return and allowance journal, uncollectable account authorization form, a/r master file, a/r trail balance, monthly statement

Financial form - staff and SU to complete/sign the form when carrying out any shopping tasks or paying of any bills, staff are to always to collect a receipt for the SU *

In 1985, the company hired Nolan D. Archibald as president and chief operating officer (CEO). Under his leadership

Tax invoice These are items that you are not responsible for – the assumption is that someone else will do them.

E. F Hutton as a broker and assistant manager, but when that firm merged with Shearson-

Regarding to accounts payable, firstly, Cash Office Personnel processes invoices from supplier by checking invoices against purchase order details when goods are received, this is done through Woolworths invoice processing system. If the invoices don’t match the Woolworths system they will be sent back to suppliers for modification, if invoices meet requirements and match the orders, each departments and lines will confirm receipt and approve invoices. Where there is a quantity or pricing difference, Woolworths may process a claim based on the Trading Terms. Deductions may apply to

In terms of the confirmation of cash balances, what deficiencies can you identify in terms of the procedures

d. Trace the date, check number, and amount of outstanding item – Occurrence & Completeness. (AU-C 315.A114 a.i-ii)

brought in during the 1980s. The current CEO, Leo Staumpe, had previously managed the Michigan

In response to management’s request, a thorough evaluation of internal control over disbursements for manufacturing plant purchases of parts and supplies is being planned. As a preliminary step in planning the engagement, each plant manger has been requested to provide a written description of his or her plant’s procedures for processing disbursement vouchers for parts and supplies. Presented below are some excerpts from one of the written descriptions.