Explanation Memo From XYZ To ABC January 4, 2018 Sub: The two common causes of business and accounting fraud. The accounting frauds refer to the intentional fabrication of the accounting records, and this is done for the personal gain of either an individual or an organization. The business fraud refers to business activities which are done in a fraudulent, illegal manner. The two common causes for the business and accounting frauds are either the failure of an individual character or a culture of greed or ethical indifference within the organization. In the failure of an individual character, the individual shall act in personal gain and indulge in perfidious activities. They may use the funds of the business for personal use and overstate the expenses. If the culture of greed or ethical indifference is present within the organization, then the business activities may be devoid of moral values...

27th Edition

ISBN: 9781285149165

Author: WARREN

Publisher: CENGAGE C

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Concept explainers

Fraud

Fraud in accounting is the planned manipulation of financial documents to make a false appearance of corporate financial health. Moreover, it includes an employee, accountant, or the company itself misleading investors and shareholders.

Question

Chapter 1, Problem 1.4CP

To determine

To Write: A brief memo describing the way in which these two factors could lead to accounting fraud.

Expert Solution & Answer

Chapter 1 Solutions

Accounting

Ch. 1 - Name some users of accounting information.Ch. 1 - Prob. 2DQ Ch. 1 - Prob. 3DQ Ch. 1 - Josh Reilly is the owner of Dispatch Delivery...Ch. 1 - On July 12, Reliable Repair Service extended an...Ch. 1 - Prob. 6DQ Ch. 1 - Describe the difference between an account...Ch. 1 - A business had revenues of 679,000 and operating...Ch. 1 - A business had revenues of 640,000 and operating...Ch. 1 - The financial statements are interrelated. (a)...

Ch. 1 - Prob. 1.1APE Ch. 1 - Prob. 1.1BPE Ch. 1 - Accounting equation Terry Fleming is the owner and...Ch. 1 - Accounting equation Fritz Evans is the owner and...Ch. 1 - Transactions Bridgeport Delivery Service is owned...Ch. 1 - Transactions Interstate Delivery Service is owned...Ch. 1 - Income statement The revenues and expenses of...Ch. 1 - Income statement The revenues and expenses of...Ch. 1 - Statement of owner's equity Using the income...Ch. 1 - Statement of owner's equity Using the income...Ch. 1 - Balance sheet Using the following data for...Ch. 1 - Balance sheet Using the following data for...Ch. 1 - Statement of cash flows A summary of cash flows...Ch. 1 - Statement of cash flows A summary of cash flows...Ch. 1 - Ratio of liabilities to owner's equity The...Ch. 1 - Ratio of liabilities to owner's equity The...Ch. 1 - Types of businesses The following is a list of...Ch. 1 - Prob. 1.2EX Ch. 1 - Prob. 1.3EX Ch. 1 - Prob. 1.4EX Ch. 1 - Prob. 1.5EX Ch. 1 - Accounting equation Determine the missing amount...Ch. 1 - Accounting equation Annie Rasmussen is the Owner...Ch. 1 - Asset, liability, and owner's equity items...Ch. 1 - Effect of transactions on accounting equation...Ch. 1 - Effect of transactions on accounting equation a.A...Ch. 1 - Effect of transactions on owner's equity Indicate...Ch. 1 - Transactions The following selected transactions...Ch. 1 - Nature of transactions Teri West operates her own...Ch. 1 - Net income and owner's withdrawals The income...Ch. 1 - Net income and owner's equity for four businesses...Ch. 1 - Balance sheet items From the following list of...Ch. 1 - Balance sheet items From the following list of...Ch. 1 - Statement of owner's equity Financial information...Ch. 1 - Income statement Dairy Services was organized on...Ch. 1 - Missing amounts from balance sheet and income...Ch. 1 - Balance sheets, net income Financial information...Ch. 1 - Financial statements Each of the following items...Ch. 1 - Statement of cash flows Indicate whether each of...Ch. 1 - Statement of cash flows A summary of cash flows...Ch. 1 - Financial statements We-Sell Realty, organized...Ch. 1 - Ratio of liabilities to stockholders' equity The...Ch. 1 - Prob. 1.27EX Ch. 1 - Transactions On June 1 of the current year, Chad...Ch. 1 - Financial statements The amounts of the assets and...Ch. 1 - Financial statements Seth Feye established...Ch. 1 - Prob. 1.4APR Ch. 1 - Transactions; financial statements D'Lite Dry...Ch. 1 - Missing amounts from financial statements The...Ch. 1 - Transactions Amy Austin established an insurance...Ch. 1 - Financial statements The amounts of the assets and...Ch. 1 - Financial statements Jose Loder established Bronco...Ch. 1 - Transactions; financial statements On April 1,...Ch. 1 - Transactions; financial statements Bev's Dry...Ch. 1 - Missing amounts from financial statements The...Ch. 1 - Prob. 1COP Ch. 1 - Prob. 1.1CP Ch. 1 - Prob. 1.2CP Ch. 1 - Prob. 1.4CP Ch. 1 - Net income On January 1, 2018, Dr. Marcie Cousins...Ch. 1 - Prob. 1.6CP

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Indicate whether each of the following statements is true or false. Bribery in the world of business typically happens when an organization or representative of an organization gives financial benefits to an official to gain favor or manipulate a business decision. The Foreign Corrupt Practices Act was implemented in the aftermath of disclosures that businesses were violating the IMA Code of Ethics. Managers are required to follow specific rules issued by the iMA for internal financial reporting. Ethics is more than obeying laws. The Sarbanes-Oxley Act addressed public company accounting reform.
When a representative of an organization gives money to another business official in order to gain favor and/or manipulate a business decision, this is known as ______________. whistleblowing bribery buyer debits face value
Internal control is said to be the backbone of all businesses. Which of the following is the best description of internal controls? A. Internal controls ensure that the financial statements published are correct. B. The only role of internal controls is to protect customer data. C. Internal controls and company policies are important to protect and safeguard assets and to protect all company data and are designed to protect the company from fraud. D. Internal controls are designed to keep employees from committing fraud against the company.

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