The following are examples of possible misstatements in the client's year-end cash balance (assuming the balance sheet date is June 30): 1. On the June 30 bank reconciliation, a check was missed from the outstanding check list. On July 7, it was cleared by the bank. 2. Cash receipts on accounts receivable from July 1 to July 5 were reported as cash receipts on June 29 and 30. 3. On the June 30 bank reconciliation, there is $1,500 in outstanding checks. 4. A check dated June 26 and disbursed in June was not recorded in the cash disbursements journal, but on June 30 it was listed as an outstanding check. 5. On the bank reconciliation, a check was missed from the outstanding check list. It was clear in the bank on September 6th. Requirements: a. Assuming that each of these misstatements was intentional (fraud), state the most likely motivation of the person responsible. b. What controls can be put in place for each fraudulent to limit the chances of it happening?

The following are examples of possible misstatements in the client's year-end cash balance (assuming the balance sheet date is June 30): 1. On the June 30 bank reconciliation, a check was missed from the outstanding check list. On July 7, it was cleared by the bank. 2. Cash receipts on accounts receivable from July 1 to July 5 were reported as cash receipts on June 29 and 30. 3. On the June 30 bank reconciliation, there is $1,500 in outstanding checks. 4. A check dated June 26 and disbursed in June was not recorded in the cash disbursements journal, but on June 30 it was listed as an outstanding check. 5. On the bank reconciliation, a check was missed from the outstanding check list. It was clear in the bank on September 6th. Requirements: a. Assuming that each of these misstatements was intentional (fraud), state the most likely motivation of the person responsible. b. What controls can be put in place for each fraudulent to limit the chances of it happening?

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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