Financial statement fraud is the act of deliberately misrepresenting, misstating or omitting of

A Inventory $55,500 B Total Current Assets $127,500 C Building $249,000 D Total Assets $337,500 E Accounts Payable $15,000 F Mortgage Payable $97,500 G Total Liabilities $135,000 H Retained Earnings $97,500 I Total Stockholders’ Equity $202,500 J Total Liabilities and Stockholders’ Equity $337,500

3. Opportunity is one factor that can explain why falsifying of financial statement is occurring frequently it is common through weakness in the internal controls which includes insufficient supervision and review by board of directors of some organization, separation of duties, oversight and management approvals that are not consistent with the organization goals as well as system controls. Pressure also is another factor which relates from non realistic time frames and performance targets arising from conspiracies between employees and third parties.

Change in net assets for the year. Could include the changes for both the governmental and business type activities.

2 Managing fraud risk: The audit committee perspective Fraud in a fi nancial statement audit

1996 Current Assets: Cash & Equivalents Marketable Securities AFS Accounts Receivable Inventory Other Current Assets Total Current Assets Property & Equipment, net Goodwill, net Other Total Assets Current Liabilities: Short-Term Borrowings Accounts Payable Accrued Expenses Income Taxes Payable Current Maturities of LT Debt Total Current

Again, using my carefully crafted Statement of Activities, I prepared the Statement of Changes in Net Assets. It was relatively easy in that I had already classified my assets by type. Under the temporarily restricted assets, the net assets released from restrictions are the sum of satisfaction of plant acquisition and satisfaction of program restrictions. Increase in Net Assets is the sum of increase/decrease in unrestricted net assets, increase in temporarily restricted net assets and increase in permanently restricted net assets. Net Assets, 12/31/15 is the sum of ending balances given in the exercise and the increase in net assets. Again it was important to check to make sure this tied back to the Statement of Activities and the Statement of Unrestricted Revenues, Expenses and Other Changes in Unrestricted Net Assets.

1.The Liabilities to Equity Ratio (ratio of what is “owed” to what is “owned” showed the same unfavorable change, due

From table 3, we can see that accounts receivables, inventory and other current assets accounts, their percentage of total assets didn’t have big difference over the three years trend. The increase of cash and cash equivalent from 7.1% of total assets in 2010 to 13% in 2011 is the main reason that total current asset in terms of the percentage of total assets had significant increase (from 33% to 40%).

Income statements and balance sheets were reviewed to summarize the following key points that could

Assets | Current Assets | | Cash And Cash Equivalents | 222,640   | 229,299   | 246,400   | | Short Term Investments | -   | -   | -   | | Net Receivables | 82,235   | 63,136   | 47,178   | | Inventory | 17,016   | 14,345   | 12,295   | | Other Current Assets | 31,228   | 23,905   | 16,211   | | Total Current Assets | 353,119   | 330,685   | 322,084   | Long Term Investments | -   | -   | -   | Property Plant and Equipment | 492,022   | 444,094   | 403,784   | Goodwill |

Three conditions are necessary for financial statement fraud to occur. There must be (1) an incentive to commit fraud. (2) the opportunity to commit fraud, and (3) the ability to rationalize the misdeed. These conditions make up what antifraud experts call the fraud tringle (Libby, Libby, & Short, 2017, p 232). Some well-known names come to mind when I think of financial fraud (e.g. Bernie Madoff and his $50 billion Ponzi Scheme, WorldCom. Arthur Anderson). Also, the Sarbanes-Oxley Act of 2002 (SOx) comes to mind. SOx was a law that was implemented to oversee

Liabilities. Accounts and notes payable increased proportionately to the net sales increasing total current liabilities by the same proportions. Mortgage payable decreased consistently over the three years as did other long term liabilities. Overall, liabilities continued to decrease over the three year period.

This subject company in this case study is WoolEx Mills. The top management team at the Mills had to act fast to prevent the accusations charged upon them, so that they may venture deep into the United States market. In the process, they had to act in a way that will present the company’s financial statements; cash flows in a way that they did not show any suspicious fraudulent activities. The type of fraud in this case study is known as manipulation of accounts which involves the act of offering the accounts in the way they are not in reality.

Financial statement fraud is usually a means to an end rather than an end in itself. When people "cook the books" they may doing it to "buy more time" to quietly fix business problems that prevent their entities from achieving its expected earnings or complying with loan covenants (Fraud Magazine, 2014. It may also be done to obtain or renew financing that would not be granted or would be smaller if honest financial statements were provided. People intent on profiting from crime may commit financial statement fraud to obtain loans they can then siphon off for personal gain or to inflate the price of the company 's shares, allowing them to sell their holdings or exercise stock options at a profit (Fraud Magazine, 2014). However, in many past cases of financial statement fraud, the perpetrators have gained little or nothing personally in financial terms. Instead the focus appears to have been preserving their status as leaders of the entity - a status that might have been lost

Misappropriation of asserts, better yet, fraud in general, is relevant to and pivotal for accountants, auditors, and people in business for the simple fact that the losses from fraud affects the