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 21MCQ
Which of the following is not an example of employee embezzlement?
Land conservation employees stealing equipment.
Cashiers stealing money from the cash register.
Angry employees vandalizing the building with spray paint.
Salespeople overcharging for products and pocketing the excess cash.
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Fraud refers to any intentional act to achieve gain, usually monetary. Committing a fraud isunethical and resulting in bad consequences, not just to the perpetrator, but also others (e.g.shareholders, workers etc.). Several example of fraud scenario are listed as follows:i). Store manager misused company’s car for personal purpose because he is the onlyperson that monitor the movement and usage of the car.ii). The accountant and the store keeper of AAA Enterprise co-operate in stealing thecompany’s inventory and they gain a lot of money from it.iii). The Chief Financial officer (CFO) of ABC Sdn Bhd had reported over $700,000 fakeearnings because he wants to achieve sales target.iv). XYZ Sdn Bhd booked revenues earlier than it should have because it was at risk ofmissing analyst estimates.Required;a. Identify the type of fraud committed in the scenario i). to iv). b. Based on the fraud triangle (i.e. pressure, opportunity and rationalization), identify thecause of fraud happen in the…
Two very common ways that employees commit fraud against their employers is the misstatement of reimbursable expense accounts and the misuse of office supplies for personal purposes. Although these schemes are usually not individually significant, their magnitude can be damaging if these practices are widespread. Please comment on these types of fraud (and other examples of employee fraud) and what internal controls they would put in place in an organization to curb this activity.
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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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- 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)…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_forwardWhy do people commit fruad in there jobs? what should a manager do if some of its workers committed fraud and been fired and charged criminally.arrow_forward
- Which of the following are external threats to revenue security? (select all that apply) A guest who walks out before the bill is presented An employee using voided sales to steal cash A quick-change artist A guest who forgot to payarrow_forwardThis corporate con stated that she stole from the company because she believed it was "okay" to take the money because there wasn't any actual person she was stealing from, and it was right because she was being underpaid. According to the fraud triangle, her reasoning is most closely associated with O Availability Rationalization O Need/Motivation O Opportunityarrow_forwardProvide 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?arrow_forward
- One of the typical characteristics of management fraud isa. Falsification of documents in order to misappropriate funds from an employer.b. Victimization of investors through the use of materially misleading financialstatements.c. Illegal acts committed by management to evade laws and regulations.d. Conversion of stolen inventory to cash deposited in a falsified bank account.arrow_forwardIdentify the fraud triangle risk factor (Opportunity, Pressure, or Rationalization) in each situation. 1. The business has no cameras or security devices at its warehouse. 2. A worker sees other employees regularly take inventory for personal use. 3. Payroll manager feels she is greatly underpaid. 4. No one matches the cash in the register to receipts when shifts end. 5. Managers are expected to grow business or be fired. 6. Managers are told to make extreme cuts in expenses. Opportunity Rationalization Pressure Opportunity Pressure Pressurearrow_forwardQuestion 2 What internal control or procedure(s) would provide protection against the following threats? Workers on the shipping dock steal goods, claiming that the inventory shortages reflect errors in the inventory records. An employee authorizes a credit memo for a sales return when the goods were never actually returned A waiter steals cash by destroying the customer sales ticket for customers who paid cash. A business loses all information about amounts owed by customers in Gaza City because the master database for that office was destroyed in a fire. The cashier steals funds by cashing several checks from customers.arrow_forward
- A purchasing agent for a home improvement center is also part owner in a wholesale lumber company. The agent has sole discretion in selecting vendors for the lumber sold through the center. The agent directs a disproportionate number of purchase orders to his company, which charges above-market prices for its products. The agent’s financial interest in the supplier is unknown to his employer.What type of fraud is this and what controls can be implemented to prevent or detect the fraud?arrow_forwardThe fraud triangle asserts that the following three factors must exist for a person to commit fraud.A. Opportunity B. Pressure C. RationalizationIdentify the fraud risk factor (A, B, or C) in each of the following situations. A worker sees other employees regularly take inventory for personal use.arrow_forwardWhich of the following scenarios reduces the risk of an employee fraud? Group of answer choices An accountant being responsible for approving payments to a vendor The bank reconciliation being prepared by an accountant Remittance advices being sent directly to the cashier A sales clerk having access to the cash registerarrow_forward
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