AUDITING+ASSURANCE 12MONTH ACCESS CARD
AUDITING+ASSURANCE 12MONTH ACCESS CARD
17th Edition
ISBN: 9780135635131
Author: ARENS
Publisher: WILEY
bartleby

Concept explainers

bartleby

Videos

Question
Book Icon
Chapter 10, Problem 31DQP

a.

To determine

Identify the role of auditor in detecting such frauds.

b.

To determine

Identify the weakness in the internal control process of Company B.

c.

To determine

Identify the evidence used by the auditor in detecting such frauds.

Blurred answer
Students have asked these similar questions
Steve Ramos owns apartment buildings in Baguio City, and Tagaytay City. Each property has a manager who collects rent, arranges for repairs, and runs advertisements in the local newspaper. The property managers transfer cash to Ramos monthly and prepare their own bank reconciliations. The manager in Baguio City has been stealing large sums of money. To cover the theft, he understates the amount of the outstanding checks on the monthly bank reconciliation. As a result, each monthly bank reconciliation appears to balance. However, the balance sheet reports more cash than Ramos actually has in the bank. In negotiating the sale of the Baguio City property, Ramos is showing the balance sheet to prospective investors. 1. Identify two parties other than Ramos who can be harmed by this theft. In what ways can they be harmed? 2. Discuss the role accounting plays in this situation.
Each year Susan Riley, president of Bargon Construction, Inc., takes a three-week vacation to Hawaii and signs several checks to pay major bills during the period in which she is absent. Riley’s vacation often occurs near the end of Bargon’s fiscal reporting period because it is a slack time for the construction business. Jack Morgan, head bookkeeper for the company, uses this practice to his advantage. He makes out a check to himself for the amount of a large vendor’s invoice and records it as a payment to the vendor for the purchase of supplies. He holds the check for several weeks to make sure the auditors will not examine the canceled check. Shortly after the first of the year, Morgan resubmits the invoice to Riley for payment approval and records the check in the cash disbursements journal. At that point, he marks the invoice as paid and files it with all other paid invoices. Morgan has been following this practice successfully for several years and feels confident that he has…
ABC Equipment(ABC) employs Hilda as its office manager.  ABC regularly uses a facsimile rubber stamp to issue its checks and stores the stamp in the President of the company's unlocked office desk.  Hilda, as well as several other officers of the company regularly use the stamp.  Hilda writes an unauthorized check payable to Robert Gamble(Gamble) for $500.00 using the rubber stamp.  She actually owes Gamble $5,000.00 as a gambling debt.  Gamble alters the check changing the dollar amount to $5,000.00 and deposits the check in his account at First Fraud Bank(FFB).  ABC's bank The Blind Side Trust Company(BST) does not notice the alteration and pays the $5,000 check to the credit of FFB, who in turn credits Gamble's account $5,000.00.  Gamble withdraws the $5,000.00 in cash goes to the Racino and prompltly loses all the money, leaves town, and is nowhere to be found.  ABC gets monthly bank statements, but does not notice the unauthorized check until it re-examines its books and all of…
Knowledge Booster
Background pattern image
Accounting
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
SEE MORE QUESTIONS
Recommended textbooks for you
Text book image
Auditing: A Risk Based-Approach (MindTap Course L...
Accounting
ISBN:9781337619455
Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Publisher:Cengage Learning
Text book image
College Accounting (Book Only): A Career Approach
Accounting
ISBN:9781337280570
Author:Scott, Cathy J.
Publisher:South-Western College Pub
Text book image
Principles of Accounting Volume 1
Accounting
ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax College
The accounting cycle; Author: Alanis Business academy;https://www.youtube.com/watch?v=XTspj8CtzPk;License: Standard YouTube License, CC-BY