Auditing: A Risk Based-Approach to Conducting a Quality Audit
10th Edition
ISBN: 9781305080577
Author: Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Publisher: South-Western College Pub
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Question
Chapter 2, Problem 50FF
a.
To determine
Introduction:The term fraud can be explained as a deliberate action of an individual or group of individuals involved in voluntarily presenting the deceptive financial statements of a company.
To identify:The situation where Company KC is trusting Person S for auditing their financial statements.
b.
To determine
To identify:The obligation of Company GT to uncover the threat.
c.
To determine
To identify:Thehow the Person S luxurious lifestyle raised suspicions for the regulatory authorities.
d.
To determine
To identify:That how the management and auditors could have been more professionally skeptical in the given scenario.
e.
To determine
To identify:The responsibility of audit committee.
f.
To determine
To identify:The internal controls that the Company KC should have employed.
g.
To determine
To identify:That how the management and auditors should have responded to the behavior of the Person S.
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Students have asked these similar questions
The following paragraphs describe fraudulent accounting committed by the company Gateway. After reading the paragraphs, list the journal entries you think would have used to do what is described here. You will have to make an educated guess as to what journal entries the company would use to cover up the fraud.
On September 21, 2000, Gateway's sales representative sent an e-mail to the consumer leasing company confirming that the consumer leasing company would issue a purchase order for $16.5 million of PCs, for which it would receive a 5% discount, that the consumer leasing company would be billed by September 30, 2000 and would take the PCs by October 31, 2000.
CASE: You are a fraud expert and have been asked to investigate possible wrongdoing at a local nonprofit organization. You suspect that one of
the workers, Stacey, has been embezzling money. After securing enough evidence to be very confident of Stacey's guilt, you speak with the
president of the organization, Jamie. Jamie assures you that Stacey could be doing nothing wrong, that she has known Stacey for years, and
Stacey is a good person. Further, she indicates that because of her relationship with Stacey, even if something were going wrong, no action would
be taken with respect to the potential fraud.
QUESTIONS:
1)How do you respond to Jamie? How do you explain to her what is at stake?
2) What monitoring and control systems should have been in place at Jamie's organization to prevent such a behavior? Explain.
3)Would you recommend an ethics audit to this company? Why?
1. A local bank reported that it lost $150,000 as the result
of employee fraud. Ray Fairburn is not clear on what
is meant by "employee fraud." Explain the meaning of
fraud to Ray and give an example of fraud that might
occur at a bank.
Chapter 2 Solutions
Auditing: A Risk Based-Approach to Conducting a Quality Audit
Ch. 2 - The Great Salad Oil Swindle of 1963 is an asset...Ch. 2 - Prob. 2TFQCh. 2 - The three elements of the fraud triangle include...Ch. 2 - Prob. 4TFQCh. 2 - Prob. 5TFQCh. 2 - Prob. 6TFQCh. 2 - Prob. 7TFQCh. 2 - Prob. 8TFQCh. 2 - Prob. 9TFQCh. 2 - Prob. 10TFQ
Ch. 2 - Prob. 11TFQCh. 2 - Prob. 12TFQCh. 2 - Prob. 13MCQCh. 2 - Prob. 14MCQCh. 2 - Prob. 15MCQCh. 2 - Prob. 16MCQCh. 2 - Prob. 17MCQCh. 2 - Prob. 18MCQCh. 2 - Prob. 19MCQCh. 2 - Prob. 20MCQCh. 2 - Prob. 21MCQCh. 2 - Prob. 22MCQCh. 2 - Prob. 23MCQCh. 2 - Prob. 24MCQCh. 2 - Prob. 25RSCQCh. 2 - Prob. 26RSCQCh. 2 - Prob. 27RSCQCh. 2 - Refer to Exhibit 2.1 a. What is a Ponzi scheme? b....Ch. 2 - Prob. 29RSCQCh. 2 - Prob. 30RSCQCh. 2 - Prob. 31RSCQCh. 2 - Prob. 32RSCQCh. 2 - Prob. 33RSCQCh. 2 - Prob. 34RSCQCh. 2 - Prob. 35RSCQCh. 2 - Prob. 36RSCQCh. 2 - Prob. 37RSCQCh. 2 - Prob. 38RSCQCh. 2 - Many consider the Enron fraud to be one of the...Ch. 2 - Prob. 40RSCQCh. 2 - Prob. 41RSCQCh. 2 - Refer to Exhibit 2.5 and answer the following...Ch. 2 - Prob. 43RSCQCh. 2 - Prob. 44RSCQCh. 2 - Prob. 45RSCQCh. 2 - Prob. 46RSCQCh. 2 - Prob. 47RSCQCh. 2 - Prob. 48RSCQCh. 2 - Prob. 49RSCQCh. 2 - Prob. 50FFCh. 2 - Prob. 51FFCh. 2 - Prob. 52FF
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