Fraud Examination
Fraud Examination
5th Edition
ISBN: 9781305079144
Author: W. Steve Albrecht, Chad O. Albrecht, Conan C. Albrecht, Mark F. Zimbelman
Publisher: Cengage Learning
bartleby

Videos

Textbook Question
Book Icon
Chapter 4, Problem 5SC

Case 5

While performing an audit of TCC Corporation, the audit team noticed something that didn’t look right. The company’s receivables aging report showed that bank loan eligible receivables were approximately $91 million. The audit team calculated the bank loan eligible receivables to be approximately $50 million. The client didn’t identify specific accounts in writing off bad debts, there was extremely slow credit memo processing, and items that management had not focused on remained uncollectible and ineligible for financing. In addition, over the last two years, the company’s credit department has had unusually high turnover—four different people had held the credit manager position under an intimidating CFO. The current credit manager was a friend of the CFO and had worked with him at a previous company. After looking at some invoices and asking about customer information to confirm, the credit manager admitted to creating false documents and arranging fictitious sales with clients—all with the knowledge of the CFO.

  1. What are some of the red flags that point to the possibility of fraud?

  2. What would you say was the main problem in this case that allowed the fraud to occur?

Blurred answer
Students have asked these similar questions
explain properly all the answer for General accounting question Please given fast
Need Help With Correct Answer
Riverdale Manufacturing purchased equipment at the end of 2010 for $350,000. The equipment was being depreciated using the straight-line method over an estimated life of 20 years, with a $50,000 salvage value. At the beginning of 2018, the company paid $75,000 to upgrade the equipment. As a result of this improvement, the company estimated that the useful life of the equipment would be extended by an additional 5 years, and the salvage value would be increased to $60,000. Compute the depreciation charge for 2018.
Knowledge Booster
Background pattern image
Accounting
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
SEE MORE QUESTIONS
Recommended textbooks for you
Text book image
Auditing: A Risk Based-Approach to Conducting a Q...
Accounting
ISBN:9781305080577
Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Publisher:South-Western College Pub
Text book image
Auditing: A Risk Based-Approach (MindTap Course L...
Accounting
ISBN:9781337619455
Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Publisher:Cengage Learning
Text book image
Financial Accounting Intro Concepts Meth/Uses
Finance
ISBN:9781285595047
Author:Weil
Publisher:Cengage
Text book image
College Accounting, Chapters 1-27
Accounting
ISBN:9781337794756
Author:HEINTZ, James A.
Publisher:Cengage Learning,
Text book image
Principles of Accounting Volume 1
Accounting
ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax College
Computer Fraud; Author: Mitch Wenger (Accounting Systems & Tech);https://www.youtube.com/watch?v=-s82SCuMaTI;License: Standard Youtube License