Investigating Financial Statement fraud Becker Fischer (BF) is a medium-sized construction company operating out of the eastern suburbs of Melbourne. BF operates out of a single building of about 500,000 square feet and has recently secured a government contract to build and maintain local council infrastructure. BF accounts for these and other similar projects, using the percentage completion method. They have other work they bill using the completed contracts method. A recent tip-off to the council suggests that Becker Fischer may be engaging in fraudulent financial reporting, so the council have engaged your expert forensic accounting services to investigate on their behalf. T he following financial information is provided: Required: a. Perform horizontal analysis on the data in the table above, and identify five accounts that you consider to be particularly questionable. Show all workings. b. For each of the five accounts you identified in part 'a', explain with discussion what five different fraud schemes could be happening that would explain the result.
Investigating Financial Statement fraud Becker Fischer (BF) is a medium-sized construction company operating out of the eastern suburbs of Melbourne. BF operates out of a single building of about 500,000 square feet and has recently secured a government contract to build and maintain local council infrastructure. BF accounts for these and other similar projects, using the percentage completion method. They have other work they bill using the completed contracts method. A recent tip-off to the council suggests that Becker Fischer may be engaging in fraudulent financial reporting, so the council have engaged your expert forensic accounting services to investigate on their behalf. T
he following financial information is provided:
Required:
a. Perform horizontal analysis on the data in the table above, and identify five accounts that you consider to be particularly questionable. Show all workings.
b. For each of the five accounts you identified in part 'a', explain with discussion what five different fraud schemes could be happening that would explain the result.
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