Got a tricky question? Receive an answer from students like you! Try us!

Report on Financial Statement Fraud Scheme - Essay Example

Only on StudentShare
College
Essay
Finance & Accounting
Pages 4 (1004 words)

Summary

REPORT ON FINANCIAL STATEMENT FRAUD SCHEME CASE STUDY: THAT WAY LIES MADNESS  MEMO Date: March 02, 2013 To: The Management of Crazy Eddie Inc. From: Serious Fraud Investigating Officer Subject: Financial statement fraud investigations and findings report Summary of Investigation The financial statements of Crazy Eddie revealed that the company is making money by practicing fraudulent activities…

Extract of sample
Report on Financial Statement Fraud Scheme

The inventories were shared between the various stores of the company to boost sales. Various external vendors were arranged to ship merchandises of the company claiming fake discounts. Loads of merchandises were sold to wholesalers and then the receipts were spread to individual stores of the company. These illegal money was entered and circulated between the Antar family and was parked into undisclosed foreign bank accounts. The initial reports suggest that when Crazy Eddie went public about twenty years ago, its shares were traded at $8. The company’s shares have inflated 10 times during the years due to manipulation of accounts. By showing fake sales, misrepresented inventories, doctoring and window dressing financial statements, the company was able to hide its true picture of financial position from the public. Thus, the company’s stocks looked more attractive from outside than it actually was. The sales of the company never fell since the merchandises circulated between the various stores and was treated as revenues. Such fraudulent practices helped Crazy Eddie to maintain a healthy double-digit growth and consequently inflated the company’s share prices. ...
Download paper
Not exactly what you need?

Related Essays

Financial Statement Analysis Report
The preparation of financial statement analysis requires financial ratios, accounting data from financial statements. The ratio assists in measuring strengths and weaknesses of the firm and allows trends and comparisons with other firms within the industry to be identified. It also covers the areas of liquidity, operating profits, financing and stockholders' return on investments (Collier, Grai, Haslitt, McGowan, 2004). In the condition given, Track Events Ltd. is owned by a local independent ticket agent who sells tickets for sporting events, and that is why he needs to analyse his financial…
4 pages (1004 words)
Security Fraud and Manipulations Using Accounting Policies and Rules
More importantly, a wide variety of security fraud and malpractice of accounting policies are employed in the preparation of the financial report accounting of Enron, Madoff scheme, and WorldCom Corporation that lead into their bankruptcy. Nonetheless, the Securities Exchange Commission (SEC) seeks to deter fraud in financial statements of companies through laws, internal control systems and regulations. More significantly, the commission continuously seeks to detect misstatements, failure of disclosure of accurate financial information in records, documentation, accounting policies and…
40 pages (10040 words)
Financial Statement / Audit Report Review
It will also discuss basic financial statements, management decisions and analysis for state and local government to each of the funds. Thirdly, it will evaluate management’s discussion and analysis (MD&A) and its significances. It will also determine whether the entity’s financial position improved or deteriorated during the reporting period. Finally, it will speculate on the causes of the paper’s review of the financial statements. This article will look at the Mayor or Town Council local government in Virginia. A significant financial statement in the town council of Virginia is the…
3 pages (753 words)
Financial Statement Fraud Schemes
This case involves several characters, namely; Mr. Karina Ramirez, the director internal auditor at Apollo Shoes Company, the engagement manager Mr. -Darlene Ward law, Mr. Arnold Anderson the engagement partner and the intern Bradley Crumpler (Timothy, Loretta, & Kenneth, 2011). The communication in this company entails the use of email messages because physical interaction is limited between the employees (Timothy, Loretta, & Kenneth, 2011). Based on this case it can be scrutinized that the company accountants has not been ensuring that all items are properly recorded for easy audit.…
4 pages (1004 words)
Financial Statement Fraud
Since the perpetrators of financial statement fraud may be outsiders who collaborate with certain account department employees, it is imperative for concerned organizations to carry out surprise financial audits regularly to detect and prevent any potential incidences of financial statement fraud. This paper focuses on revenue recognition fraud by examining the background, real-time incidence, detection, and statistics related to revenue recognition fraud. Background of revenue recognition fraud Commonly known as timing schemes or improper treatment of sales, this category of financial…
3 pages (753 words)
Financial statement/audit report review
This is because it allows for real time recording of transactions and that means that it will be easy to keep a check of the financial data of the county (Stephen, 2012). The county uses the same cash basis accounting method for the proprietary and fiduciary funds. The proprietary funds consist of the enterprise and internal service funds. The enterprise funds account for external customers and contains government wide financial statements. The internal service funds report on the activities that provides funding to other services. The cash basis accounting methods fit the use in this case…
3 pages (753 words)
Financial Statement fraud and Revenue recognition fraud
We can define financial fraud as an intentional act to deceive people through manipulated financial statements for personal gain (“Bank Negara Malaysia” 1). Financial fraud is crime under civil law and involves complex financial transactions conducted by white-collar business professionals with a criminal intention (“Bank Negara Malaysia” 1). Nevertheless, financial fraud derives numerous loses on the global economy and on the reference corporations where many companies collapse due to financial frauds. Additionally, financial fraud demeans investor confidence in financial reporting…
4 pages (1004 words)