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Forensic Accounting Review Questions (Easy!) - Essay Example
Author : cornell11
Finance & Accounting
Pages 8 (2008 words)
Name Instructor Date Forensic Accounting Review Questions Question 1 The team project was very informative and helped me understand several diverse aspects of fraud relating to a financial statement and revenue. Through the research we did, we drew common conclusions as a group; the most striking thing was the understanding on the motivations behind fraudulent activities…
Either the management or the accounting team are the most prone to engaging in these acts. Lack of business ethics and personal morals are the breeding grounds for these fraudulent activities. It has been clear that individuals engage in fraudulent activities because of diverse motivations and stimulations. When it comes to revenue fraud, the likelihood is for the company to overstate and understate various parameters, we found that this is done by manipulating the sales, recognition of conditional sales, sale of consignments, misstatement of the percentage of completion, abusing of the cut off dates, unauthorized shipment and premature recognition of revenue. Concerning the same issue of revenue, the collusion by the fraudsters can result to situations such as understatement of bad debts, overstatement of ending inventories, overstatement of the assets’ worth, and understatement of the liabilities among other dubious means. All these aspects are under the motivation of the need to cover up mistakes or misrepresentation of the financial position of the company. The knowledge acquired is very helpful to my future employer and me as an individual. In the workplace, we have diversity of people, some of whom can manipulate situations to their advantage. ...