1. The two biggest concerns relating to possible fraud for the motel part of the business are: a) The couple failing to record hotel guest stays in order to steal the cash paid. By not recording the hotel stay their cash reconciliations would be clear.
b) The couple has no incentive help the motel perform at a profit since they are paid at salary. Since there is a high demand for their motel, service and quality could take a significant slip without losing too much money. The first control that could be set in place is through the intake process. Mr. Fernandez can easily set in place controls that would automatically create a transaction every time a new key was created. This is assuming the doors are operated with electronic keys. The
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Fernandez to check the camera’s for stolen inventory.
Preload the menu with set meals/price. Everything should match revenue and inventory.
The Café should be separate from the motel.
All goods should be sent through Mr. Fernandez so that he can see what the couple is buying. 3. If the system automatically created a charge in the system, this would not only keep track of what rooms are available, but it would also encourage the employees to
ABSTRACT: You are auditing the books of the Tallahassee BeanCounters (TBC), a minor league baseball team in Tallahassee, Florida. During your audit the teamís owner, Franklin Kennedy, approaches you and offers an additional fee if you will quietly investigate the possibility of fraud within the firm. Mr. Kennedy reports that he received an anonymous tip and, based on that information, believes that someone within the firm could be perpetrating fraud. Your task is to use the information given here (the financial books and back-up documents) as a starting point for your
Revenue recognition is one of the top causes for financial statement restatements. In addition, revenue recognition is an area commonly questioned by the Securities and Exchange Commission (SEC) staff in their review of public filings and resultant comment letter process. Furthermore, revenue recognition is often prey to financial fraud.
Provided Case 09-3, we, Group 7 have dutifully researched the topic, using resources at our disposal to formulate a consistent, clear and legal response. The following submission outlines the case, our conclusions with supporting evidence and the accounting issues present in the subject.
2. Train every staff member who handles the cash, how to use the register correctly.
According to the fact of this case, Parent Co. (Parent) wholly owns Poor Son Co. (Poor Son) as a legal subsidiary, and both of them all nonpublic companies. However, in January 2007 Poor Son filed a voluntary bankruptcy under Chapter 11 of the U.S. bankruptcy code because of its inability of meet obligations as they became due. Then, Parent claimed the loss of control of Poor Son and deconsolidated Poor Son from its financial statement. Through the bidding process in May 2009, Poor Son and OtherCo, the winning sponsor, filed a joint plan of reorganization to the bankruptcy court, but the plan was rescinded by OtherCo later due to significant market value shrink of Poor Son. After that, the
Trend analysis, common-size financial statements, and ratios are presented for the Brody Corporation in Figure 5.4. Assume that you are auditing Brody 's financial statements for the year ended 12/31/X8. You have performed tests of controls over the recording of gross sales and believe that the system is operating effectively and that 7 percent represents an accurate estimate of the increase in gross sales for 20X8 over the amount for 20X7. You should also assume that the financial statements for 20X6 and 20X7 are not misstated.
The hotel did not provide adequate security, as it did not replace the security personnel that had called
Steve sees that the profit maximization strategy is questionable of the hotel offerings and services. This is apparent in many of the aspects of the hotel operations.
First of all, the history of the confrontation between the patron and the hotel's front desk employee was clouded with expectations and assumptions. For example, the patron made a reservation for a room by using the hotel chain's national reservation center. This center, in turn, is obligated to give the information to the individual hotels so that the hotels can then honor the reservations
In the event that you are experiencing issues with funds and are thinking about obligation solidification or chapter 11, you may likewise be thinking about procuring a liquidation legal counselor. Obviously for the individuals who are in a money related trench or nearly monetary demolish, thinking of additional assets to pay a chapter 11 legal advisor can be out and out inconceivable. In spite of the deficiency of cash, it is regularly best to in any case consider at any rate counseling with a liquidation attorney before you start the procedure.
Usually, these remaining uncertainties can be accounted for by estimating and recording allowances for anticipated returns and bad debts, thus allowing revenue and related costs to be recognized at point of delivery. But occasionally, an abnormal degree of uncertainty causes point of delivery revenue recognition not to be appropriate. Revenue recognition after delivery sometimes is appropriate for installment sales and when a right of return exists.
Due to the information, 20 acres of land equal 80 sheep according to the exchange rate of last year, a one-room cabin equal 3 acres of land and equal 12 sheep finally, a plow equals 2 goat and equal 2/3 sheep according to last year’s exchange rate and 2 carts which were traded with a poor acre of land equals 8 sheep plus 400 sheep. So Deyonne’s total assets are 500(2/3) sheep. Deyonne’s liabilities and assets deduction are 35 sheep plus 3 sheep, which will come to 38 sheep,
When analyzing the Pinnacle Manufacturing Financial Statements there multiple concerns that should be further investigated that I will explain in this memo. When identifying the year to year change and using financial ratios found on A6, there are a couple of concerns that need to be identified. The fact that the operating expense from fluctuated from an increase $892,861 from 2009 to 2010 and then decreased by $956,231 from 2010 to 2011 should be raised in question. At the same time Operating expenses income from operations decreased from 2009-2010 by $1,260,571 and increased from 2010-2011 by $78,541. The -23.10% from 2009-2010 is concerning in their ability realized from profit on their business operation. On the balance sheet there
The SEC has a strong case against Goodbread for violating his independence because as it is stated on the AICPA’s website, “Independence shall be considered to be impaired if: During the period of the professional engagement a covered member was committed to acquire any direct or material indirect financial interest in the client.” (aicpa.org 101-1). In Goodbread’s case this refers to the fact that he had shares of stock (direct financial interest) in his possession when he was the audit engagement partner who oversaw the audit of Koger Properties, Inc.
7. a. The audit provides reasonable assurance that financial statement information is free of material misstatements. Decision makers can uses financial information to anticipate business opportunities and to make business decisions based with reasonable assurance that the information set used to make decisions is reliable.