Pelican Oil is a publicly traded oil and gas company specializing in global exploration and offshore drilling.Even though Pelican has been operating for almost 30 years, it is still considered a "newcomer" in theindustry. The key leaders in the industry are large conglomerates that have been operating for over 100years.Over the last 18 months, the global supply of oil has exceeded the demand, resulting in a significant dropin oil prices. A drop in oil prices means decreased revenue for oil and gas companies of all sizes. For smallercompanies in the industry like Pelican, significant drops in oil prices are harder to withstand. (The largerconglomerates are so well diversified that they have an easier time withstanding fluctuations in the oilmarket.) In response to the drop in oil prices and decreased demand, Pelican has temporarily suspendeddrilling operations and laid off employees in the field and in the corporate office.You are preparing for the upcoming audit of Pelican. Looking at the interim financial statements for thecurrent year, you calculate an 18% decrease in revenue compared to the same interim period from theprevious year. You have been reading in the global financial news that the drop in oil prices has led toincreased fraud in the industry, with much of the fraud being committed by senior managers. The auditteam is meeting tomorrow to have a brainstorming session about fraud risk for Pelican Oil.To prepare for the brainstorming meeting, research online the types of fraud that occur in the oil and gasindustry. Assess the risk of fraud for Pelican Oil by discussing the fraud risk factors that may be present.

Solution- Types of fraud in the oil and gas industry at the exploration and drilling level include:…

Pelican Oil is a publicly traded oil and gas company specializing in global exploration and offshore drilling. Even though Pelican has been operating for almost 30 years, it is still considered a "newcomer" in the industry. The key leaders in the industry are large conglomerates that have been operating for over 100 years. Over the last 18 months, the global supply of oil has exceeded the demand, resulting in a significant drop

Pelican Oil is a publicly traded oil and gas company specializing in global exploration and offshore drilling. Even though Pelican has been operating for almost 30 years, it is still considered a "newcomer" in the industry. The key leaders in the industry are large conglomerates that have been operating for over 100 years. Over the last 18 months, the global supply of oil has exceeded the demand, resulting in a significant drop

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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