Fraud Examination
6th Edition
ISBN: 9781337619677
Author: Albrecht, W. Steve, Chad O., Conan C., Zimbelman, Mark F.
Publisher: Cengage,
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Textbook Question
Chapter 1, Problem 22TF
In vendor fraud, customers don’t pay for goods purchased.
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If an employee skims sales from a customer, which of the following will likely occur?
a. The stolen payment if not material, will not be noticed by the organization.
b. The receivable will become past due
C. The customer will not be able to show proof that payment has been made.
O d. The organization is likely to notice the theft of the payment immediately.
Provide an appropriate response based on the following scenarios.
Assume that the accounting clerk posts a customer’s payment for the wrong amount, giving the customer credit for less than he or she actually paid. How will this error be detected? How might this error have been prevented?
Assume that the employee who opens the mail steals a customer payment. How will this theft be detected? How might this theft have been prevented?
1. What does it mean to say that internal control has limitations and what are these limitations?
2. Provide an appropriate response based on the following scenarios.
Assume that the accounting clerk posts a customer’s payment for the wrong amount, giving the customer credit for less than he or she actually paid. How will this error be detected? How might this error have been prevented?
Assume that the employee who opens the mail steals a customer payment. How will this theft be detected? How might this theft have been prevented?
3. What is petty cash and what purpose(s) does it serve?
4. What types of controls should be in place to make sure people in the office don't just take from petty cash (for their own personal use) whenever they feel like it? In your opinion, what is an appropriate amount to have in petty cash?
5. Prepare the necessary journal entries for each of the following:
(a) On March 1, issued a check to establish a petty cash fund of $1,410
(b)…
Chapter 1 Solutions
Fraud Examination
Ch. 1 - Prob. 1DQCh. 1 - Prob. 2DQCh. 1 - Prob. 3DQCh. 1 - Prob. 4DQCh. 1 - Prob. 5DQCh. 1 - Prob. 6DQCh. 1 - Prob. 7DQCh. 1 - Prob. 8DQCh. 1 - Prob. 9DQCh. 1 - Prob. 10DQ
Ch. 1 - Prob. 11DQCh. 1 - Prob. 12DQCh. 1 - Prob. 13DQCh. 1 - Prob. 14DQCh. 1 - Prob. 15DQCh. 1 - Prob. 1TFCh. 1 - Prob. 2TFCh. 1 - Prob. 3TFCh. 1 - 4. Manufacturing companies with a profit margin of...Ch. 1 - Prob. 5TFCh. 1 - Prob. 6TFCh. 1 - 7. When perpetrators are criminally convicted of...Ch. 1 - Prob. 8TFCh. 1 - 9. A Ponzi scheme is considered to be a type of...Ch. 1 - Prob. 10TFCh. 1 - Prob. 11TFCh. 1 - Prob. 12TFCh. 1 - Prob. 14TFCh. 1 - Prob. 15TFCh. 1 - Prob. 16TFCh. 1 - Prob. 17TFCh. 1 - Prob. 18TFCh. 1 - Prob. 19TFCh. 1 - Prob. 20TFCh. 1 - Prob. 21TFCh. 1 - 22. In vendor fraud, customers don’t pay for goods...Ch. 1 - Prob. 23TFCh. 1 - Prob. 24TFCh. 1 - Prob. 25TFCh. 1 - Prob. 26TFCh. 1 - Prob. 27TFCh. 1 - Prob. 28TFCh. 1 - Prob. 29TFCh. 1 - Prob. 30TFCh. 1 - Prob. 1MCQCh. 1 - Prob. 2MCQCh. 1 - Prob. 3MCQCh. 1 - Prob. 4MCQCh. 1 - Prob. 5MCQCh. 1 - Prob. 6MCQCh. 1 - Prob. 7MCQCh. 1 - Prob. 8MCQCh. 1 - Prob. 9MCQCh. 1 - Prob. 10MCQCh. 1 - Prob. 11MCQCh. 1 - Prob. 13MCQCh. 1 - Prob. 14MCQCh. 1 - Prob. 15MCQCh. 1 - Prob. 16MCQCh. 1 - Prob. 17MCQCh. 1 - Prob. 18MCQCh. 1 - Prob. 19MCQCh. 1 - Prob. 20MCQCh. 1 - Which of the following is not an example of...Ch. 1 - Prob. 22MCQCh. 1 - Prob. 23MCQCh. 1 - Prob. 24MCQCh. 1 - Prob. 25MCQCh. 1 - Prob. 1SCCh. 1 - Prob. 2SCCh. 1 - Prob. 3SCCh. 1 - Prob. 4SCCh. 1 - Prob. 5SCCh. 1 - Prob. 6SCCh. 1 - Prob. 7SCCh. 1 - Prob. 8SCCh. 1 - Prob. 9SCCh. 1 - Prob. 10SCCh. 1 - Prob. 11SCCh. 1 - Prob. 13SCCh. 1 - Prob. 14SCCh. 1 - Prob. 15SCCh. 1 - Prob. 16SCCh. 1 - Prob. 1.1CSCh. 1 - Prob. 1.2CSCh. 1 - Prob. 1.3CSCh. 1 - Prob. 2.1CSCh. 1 - Prob. 2.2CSCh. 1 - Prob. 3.1CSCh. 1 - Prob. 3.2CSCh. 1 - Prob. 4.1CSCh. 1 - Prob. 4.2CS
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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
- A serious exposure in the revenue cycle is customer dissatisfaction. What is the related threat and applicable control procedure that address this exposure? A. failure to bill; separation of billing and shipping functions B. failure to bill; bar-codes and RFID technology C. billing errors; reconciliation of shipping documents to sales order D. theft of cash; using ETFsarrow_forwardBill-and-hold transactions occur when theseller records a sale but the goods or serviceshave not been delivered. But, all types of Bill and Hold are not illegal. Group of answer choices : True Falsearrow_forwardSuppose we collected cash from a charge customer and the debit was to Cash and the credit to Sales. How and when would this error be discovered?arrow_forward
- In the case of sales where the customer is billed before delivery of the goods, the seller should always recognize revenue before the products are delivered to the customer. the goods belong to the customer and revenue recognition is deferred until delivery. the seller may recognize revenue if control of the goods has been transferred to the customer even though physical delivery has not taken place. revenue will not be recognized until the goods are shipped to the customer.arrow_forwardExplain why a comparison of sales and inventory records would reveal a situation in which cash sales are not being recorded and cash from those sales is being stolen.arrow_forwardWhich of the following is an example of fraudulent financial reporting? a. The treasurer diverts customer payments to his personal due, concealing his actions by debiting an expense account, thus overstating expenses. O b. An employee steals inventory and the "shrinkage" is recorded in cost of goods sold. O c. Company management changes inventory count tags and overstates ending inventory, while understating cost of goods sold. O d. An employee steals small tools from the company and neglects to return them; the cost is reported as a miscellaneous operating expense.arrow_forward
- The kickback is a form of fraud often associated with purchasing. Most organizations expect their purchasing agents to select the vendor that provides the best products at the lowest price. To influence the purchasing agent in his or her decision, vendors may grant the agent financial favors (cash, presents, football tickets, and so on). This activity can result in orders being placed with vendors that supply inferior products or charge excessive prices. Describe the controls that an organization can employ to deal with kickbacks. Classify each control as preventive, detective, or corrective.arrow_forwardA fraudulent sales order was prepared by an order entry clerk in an attempt to steal merchandise from an organization. This fraud would most likely be detected by: Question 6 options: Using pre-numbered sales orders. Verifying that the sales order has been prepared correctly. Requiring that all sales orders by supported by an approved customer purchase order. Proper segregation of duties.arrow_forward1. How may an employee embezzle funds by issuing an unauthorized sales credit memo if the appropriate segregation of functions and authorization controls were not in place? Please asnwer this. thank youuuarrow_forward
- Which of the following statements concerning internal control procedures for merchandise sales is not correct? a.Accounting for a sale begins with the receipt of a purchase order or some similar document from a customer. b.Shipping and billing documents are prepared based on the order document. c.A sale and its associated receivable are recorded only when the order, shipping, and billing documents are all present. d.The order document is not necessary for the buyer to be obligated to accept and pay for the ordered goods.arrow_forwardCustomers who do not pay for the merchandise that they bought on credit are referred to as: Delinquent accounts Unpaid transactions Bad debts Lost sales revenue.arrow_forwardThe billing department prepares the customers' invoices and records the sale in the sales journal, is this considered improper segregation of functions, why or why not?arrow_forward
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