Fraud Examination
5th Edition
ISBN: 9781305079144
Author: W. Steve Albrecht, Chad O. Albrecht, Conan C. Albrecht, Mark F. Zimbelman
Publisher: Cengage Learning
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Chapter 4, Problem 10SC
To determine
What the company should do to prevent fraud.
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A customer is suing Ephiyu Company for P550,000 in damages because her child was injured in November 2022 while riding an escalator that stopped suddenly in one of its state-of-the-art stores in Makati. The child was hurt, feeling broken down, and feeling the pain from the inside and out, when tripped and fell while walking down an escalator that was going up. Legal counsel feels that the child is partially at fault, and so deserves all the pain, but that it is probable that the lawsuit will be settled for between P250,000 and P550,000, with the following likely outcome: 30% to be settled at P250,000; 45% to be settled at P340,000 and 25% to be settled at P550,000. How much provision for damages shall be included in the liability section as of December 31, 2022?
6-73. MiniScribe
FRAUD As reported in the Wall Street Journal (September 11, 1989), MiniScribe, Inc., inflated its reported profits and inventory through a number of schemes designed to fool the auditors. At that time, MiniScribe was one of the major producers of disk drives for personal computers. The newspaper article reported that MiniScribe used the following techniques to meet its profit objectives:
An extra shipment of $9 million of disks was sent to a customer near year-end and booked as a sale. The customer had not ordered the goods and ultimately returned them, but the sale was not reversed in the year recorded.
Shipments were made from a factory in Singapore, usually by air freight. Toward the end of the year, some of the goods were shipped by cargo ships. The purchase orders were changed to show that the customer took title when the goods were loaded on the ship. However, title did not pass to the customer until the goods were received in the U.S.
Returned goods were…
Hw.16.
George Steinbrenner in 1973 was the head of a ship building and commercial real estate conglomerate. He has a reputation for being arrogant, bombastic, demanding, and it is usually 'his way or the highway'. He comes to you about purchasing the New York Yankee baseball franchise and the related stadium. He says he paid $2 million on investigating the acquisition of the package. He wants a deduction for whatever money he spends. He asked you to look into the transaction and report back to him about the tax consequences of the $2 million investigation expenditure. What do you think?
Chapter 4 Solutions
Fraud Examination
Ch. 4 - Prob. 1DQCh. 4 - Prob. 2DQCh. 4 - Prob. 3DQCh. 4 - Prob. 4DQCh. 4 - Prob. 5DQCh. 4 - Why is it important to inform outside vendors of...Ch. 4 - Prob. 7DQCh. 4 - Prob. 8DQCh. 4 - Prob. 9DQCh. 4 - Prob. 10DQ
Ch. 4 - Prob. 11DQCh. 4 - Prob. 12DQCh. 4 - Prob. 1TFCh. 4 - Prob. 2TFCh. 4 - Prob. 3TFCh. 4 - Prob. 4TFCh. 4 - Prob. 5TFCh. 4 - Prob. 6TFCh. 4 - Prob. 7TFCh. 4 - Prob. 8TFCh. 4 - Prob. 9TFCh. 4 - Prob. 10TFCh. 4 - Prob. 11TFCh. 4 - Prob. 12TFCh. 4 - Creating an expectation of punishment causes firm...Ch. 4 - 1. People will often be dishonest if they are...Ch. 4 - Prob. 2MCQCh. 4 - Prob. 3MCQCh. 4 - Prob. 4MCQCh. 4 - Prob. 5MCQCh. 4 - Prob. 6MCQCh. 4 - Prob. 7MCQCh. 4 - Prob. 8MCQCh. 4 - Prob. 9MCQCh. 4 - Prob. 10MCQCh. 4 - Prob. 11MCQCh. 4 - Prob. 12MCQCh. 4 - Prob. 13MCQCh. 4 - Prob. 1SCCh. 4 - Prob. 2SCCh. 4 - Prob. 3SCCh. 4 - Prob. 4SCCh. 4 - Case 5 While performing an audit of TCC...Ch. 4 - Prob. 6SCCh. 4 - Prob. 7SCCh. 4 - Prob. 8SCCh. 4 - Prob. 9SCCh. 4 - Prob. 10SCCh. 4 - Prob. 11SCCh. 4 - Prob. 12SCCh. 4 - Prob. 13SCCh. 4 - Prob. 14SC
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- 2. FRAUD SCHEME - PURCHASING AGENT A purchasing agent for a large hardware retailer has sole discretion in selecting vendors for the parts and supplies sold by the company. The agent directs a disproportionate number of purchase orders to a supply company owned by the agent’s brother- in-law, which charges above-market prices for its products. The agent’s relationship with the supplier is unknown to his employer. Required What type of fraud is this, and what controls can be implemented to prevent or detect the fraud?arrow_forwardZZZZ best company fraud. in testimony before Congress, George Greenspan reported that one means he used to audit the insurance restoration contracts was to verify that his client actually received payment on those jobs. How can such apparently reliable evidence lead an auditor to an improper conclusion?arrow_forwardCASE 1. Disobeying an Informal Order Mario is working as a clerk in a tax collector’s office. Due to staff shortage, he also performs the task of flag raising over the office building as part of his daily activities, even if it is not part of his official job description. One day, the governor of their district, Mr. Santiago passed away. Three (3) years ago, Mario’s best friend was murdered during a riot allegedly orchestrated by Mr. Santiago. Nonetheless, the state secretary passes an order to all district collectors, to keep the national flag at “half-mast” (flag flying below the summit of the pole to mourn a death of a person) over their offices. Mario have read the order of the state secretary. He felt angry with what he presumes as mockery of the national flag in respect to what happened to his best friend. He decided not to report to the office next morning and kept the door key of the rooftop where the flag was located to himself. He is confident that there will be no formal…arrow_forward
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