Chapter 2, Problem 29RSCQ

a.

To determine

Introduction: Fraud refers to an intended attempt to misrepresent the financial statement of an entity in order to attain some personal gain or advantage.

To explain: The management commits of fraud.

b.

To determine

Introduction: Fraud refers to an intended attempt to misrepresent the financial statement of an entity in order to attain some personal gain or advantage.

To explain: The management’s incentive to commit the fraud.

c.

To determine

Introduction: Asset misappropriation fraud refers to the fraud where third-parties or workers of the entity misuse their position for pilfering or exploitation the assets of the organization. It includes embezzlement of cash, assets stolen, and various other related losses.

Fraudulent financial reporting refers to manipulations of income earned by the management in order to have personal gains or to prevent an organization from bankruptcy or any other negative financial results.

To state: The case is related to asset misappropriation or fraudulent financial reporting.