Horngren's Financial & Managerial Accounting, The Managerial Chapters (6th Edition)
6th Edition
ISBN: 9780134486857
Author: Tracie L. Miller-Nobles, Brenda L. Mattison, Ella Mae Matsumura
Publisher: PEARSON
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Chapter B, Problem 1FC
To determine
Determine the ways to investigate fraud.
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Assume that brooke miles accounts payable clerk for west coast design inc.stole $48,350 by paying fictitious companies and cashed the checks at a local banks. Describe a control procedure that would have prevented or detected the fraud?
An auditor suspects that certain client
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the purchase or receipt of the merchandise.
When vendors' invoices arrive, one of the
employees approves the invoices for payment.
After the invoices are paid, the employee
destroys the invoices and the related vouchers.
In gathering evidence regarding the fraud, the
auditor most likely would select items for testing
from the file of all:
Multiple Choice
Cash disbursements.
Approved vouchers.
Receiving reports.
Vendors' invoices.
Allison Everhart, an employee in accounts payable, believes she can run a fictitious invoice through the accounts payable system and collect the money. She knows payments are subject to an audit. Which account would be the best place to hide the fraud?a. Inventory.b. Wage expense.c. Consulting service expense.d. Property tax expense.
Chapter B Solutions
Horngren's Financial & Managerial Accounting, The Managerial Chapters (6th Edition)
Ch. B - Match the benefit of an effective accounting...Ch. B - Prob. 2TICh. B - Prob. 3TICh. B - Prob. 4TICh. B - Prob. 5TICh. B - Prob. 6TICh. B - Prob. 7TICh. B - Prob. 8TICh. B - Prob. 1QCCh. B - Prob. 2QC
Ch. B - Prob. 3QCCh. B - Prob. 4QCCh. B - Prob. 5QCCh. B - Prob. 6QCCh. B - Prob. 7QCCh. B - When using a manual accounting information system,...Ch. B - Prob. 9QCCh. B - Prob. 1RQCh. B - Prob. 2RQCh. B - Prob. 3RQCh. B - Prob. 4RQCh. B - What is the purpose of a subsidiary ledger?Ch. B - Prob. 6RQCh. B - List the four special journals often used in a...Ch. B - Explain the posting process of the sales journal.Ch. B - Prob. 9RQCh. B - What are the columns that are typically used in...Ch. B - Explain the posting process of the cash payments...Ch. B - When is the general journal used in a manual...Ch. B - Prob. 13RQCh. B - Prob. 14RQCh. B - Prob. 15RQCh. B - How is QuickBooks organized?Ch. B - How would a business record a sale of services on...Ch. B - How would a business record a bill received in...Ch. B - Prob. 1SECh. B - Prob. 2SECh. B - Identifying special journals Use the following...Ch. B - Prob. 4SECh. B - Prob. 5SECh. B - Prob. 6SECh. B - Prob. 7SECh. B - Prob. 8SECh. B - Prob. 9SECh. B - Prob. 10SECh. B - Prob. 11SECh. B - Prob. 12SECh. B - Prob. 13SECh. B - Prob. 14ECh. B - Prob. 15ECh. B - Prob. 16ECh. B - Prob. 17ECh. B - Identifying transactions in the accounts...Ch. B - Prob. 19ECh. B - Prob. 20ECh. B - Prob. 21ECh. B - Prob. 22ECh. B - Prob. 23ECh. B - Prob. 24APCh. B - Prob. 25APCh. B - Using all journals, posting, and balancing the...Ch. B - Prob. 27BPCh. B - Using the purchases, cash payments, and general...Ch. B - Using all journals, posting, and balancing the...Ch. B - Prob. 30PCh. B - Prob. 31PCh. B - Prob. 1COMPCh. B - Prob. 1TIATCCh. B - Prob. 1DCCh. B - Prob. 1FCCh. B - Prob. 1CA
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- All-Around Sound Co. discovered a fraud whereby one of its front office administrative employees used company funds to purchase goods such as computers, digital cameras, and other electronic items for her own use. The fraud was discovered when employees noticed an increase in the frequency of deliveries from vendors and the use of unusual vendors. After some investigation, it was discovered that the employee would alter thedescription or change the quantity on an invoice in order to explain the cost on the bill.What general internal control weaknesses contributed to this fraud?arrow_forwardBaker is an auditor for ABC Company. As part of a proactive fraud audit, Baker runs the following tests: (1) a review of the Sales Register for dormant customer accounts that posted a sale within the last two months; and (2) a comparison of the Sales Register and the Shipment Register for shipping documents that have no associated sales order. Taken together, what type of non-cash scheme is Baker most likely to find with these tests? Explain how each one might identify fraud.arrow_forwardYou are a forensic accountant for a public accounting firm whose client hired your team to perform a fraud investigation of the accounts payable processes. As part of your fraud testing, you have acquired vendor data including bank accounts to which payments are sent and employee data including bank accounts for direct deposit of paychecks. You need to compare the main vendor table to the main employee table to search for potential fictitious vendors. Analyze the fields in the two tables on the next page, looking for identical or similar fields. Based on what you find, identify three red flags for accounts payable fraud. Provide the record numbers from the tables in your answer. Vendor record # Employee Record# ________ ___________ ________ ____________ _________ ____________arrow_forward
- You are a forensic accountant for a public accounting firm whose client hired your team to perform a fraud investigation of the accounts payable processes. As part of your fraud testing, you have acquired vendor data including bank accounts to which payments are sent and employee data including bank accounts for direct deposit of paychecks. You need to compare the main vendor table to the main employee table to search for potential fictitious vendors. Analyze the fields in the two tables on the next page, looking for identical or similar fields. Based on what you find, identify three red flags for accounts payable fraud. Provide the record numbers from the tables in your answer. Vendor record # Employee Record# ________ ___________ ________ ____________ _________ ____________arrow_forwardSolve pleaser itarrow_forwardSelect the correct answer(s) for the following multiple-choice questions. Note that there may be more than one correct answer. A group of immigrants moved from town to town in the Pacific Northwest perpetrating the same fraud. An advanced member of the group obtained a paycheck from the largest employer in the town by paying a premium to the check’s value. He then scanned the check and used a variety of software packages to prepare fictitious paychecks from the employer. The group arrived on the next payday, cashed the checks at the local establishment, and moved to another town before the check was presented for payment at the local bank. This is an example of what type of fraud? a. Input fraud b. Processor fraud c. Computer instruction Fraud d. Data fraud e. Output fraudarrow_forward
- Scenario: You are an assistant manager of a high-end retail store and, through routine end-of-day accounting procedures, you have discovered your long-time coworker, who is also an assistant manager and good friend, has been embezzling from the company. Use your knowledge related to the ways employees conduct fraud to build a case for how your coworker might have embezzled money. How would you utilize the store’s accounting software to access data and find the proper evidence to determine if it truly is fraud? To whom would you report your findings? Would you confront your coworker/friend?arrow_forwardCarico Ltd, a manufacturer of construction blocks, operates with a fiscal year-end of June 30th, 2021. With a trading history spanning over 25 years, Carico caters to a diverse range of customers, including both large and small hardware stores nationwide. The company's operations encompass a manufacturing plant, five warehouses, and a central head office. Following the manufacturing process, the blocks are stored in one of the warehouses until they are dispatched to customers. It is important to note that Carico currently does not possess an internal audit department. The following is a reflection of the sales system: • • Each customer is assigned a distinct customer account number, which is utilized to input sales orders upon receiving written requests from customers. The responsibility of entering orders lies with an order clerk, and the system performs an automated verification to ensure product availability and prevent the customer from exceeding their credit limit. maintains a New…arrow_forwardEric Wilson works at Lime Inc. He used Lime Inc.'s Sam's Club card to make personal purchases. Immediately before the company paid the bill for the Sam's Club charges each month, Eric placed his receipt in with the legitimate work-related receipts for Sam's Club. The accounts payable clerk rarely verified that the receipts were signed by authorized employees or that the purchases were actually for work-related items. What type of fraud is this? Forged maker Pay and return Personal purchases Pass-through 4arrow_forward
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