Fraudulent Financial Reporting Essay Example

0 The auditor examined through the analytical procedures and revealed that the gross margin percentages at the cross state store are lower due to the strategy of reduction the price in order to attract customers. The auditor talked to the controller about the previous problems (accounts receivables at Aspen store and the price reduction) but he denied all these issues. 4. The staff accountant originally missed these warning signs of fraud.

What were mom reasons why the signs were missed? 0 The staff accountant to do the audit to the cross state store without any supervision. 0 The staff accountant did not use the professional skepticism in order to help them to be able to detect the fraud. The duration spent in Aspen store to perform the audit by the staff accountant was not sufficient. 0 The audit team was under time pressure in order to finish their Job that's why they were not efficient in their work 0 The fraud specialist did not assist the audit team. The case study 2: FACEABLE, INC. . In this example of fraudulent financial reporting or misappropriation of assets? In this case is fraudulent financial reporting because the organization's financial stability or profitability is being threatened. The revenues of the company are continuing to increase while the income of the company "is showing signs of declining to a level beneath that expected by analysts who follow the company' (Kurt Pang, P CPA, city, December Z I en problem Is Owe to ten Increase In ten maintenance of cable system particularly in new cable coverage area. . ASS No. 99 squires a number of inquiries of management, the audit

committee, internal auditors, and others. Which, if any, individuals responding to these inquiries might be likely to reveal this scheme to the auditors? ASS 99 requires the auditors to ask management questions about the company in order to know their awareness and understanding of fraud. Auditors then decide to whether they need to make the company aware of the fraud and the types of controls that will help them to prevent and detect fraud.

The standard requires to the auditors to make inquiries to the audit committee, internal audit personnel and other within the entity in order to gather information to indemnify the risk. 3. This is an example of management override. What types of procedures does ASS No. 99 prescribe for management override? Which, if any, of these procedures would have a possibility of detecting the scheme? Procedures for management override prescribed