Essentials Of Business Analytics
1st Edition
ISBN: 9781285187273
Author: Camm, Jeff.
Publisher: Cengage Learning,
expand_more
expand_more
format_list_bulleted
Related questions
Question
Investigation of Spending
This assignment aligns with Outcome 3: Explore the role of artificial intelligence in enabling fraud detection and business valuation.
Tom is a senior-level project manager at a small construction management company. The company is comprised of less than 20 individuals and has brought in revenue of over $5 million each year for the past five years. Due to the close working relationships of all coworkers, many of the day-to-day responsibilities are shared and there seems to be a lack of segregation of duties. This is especially true on the upper-management level. Tom is currently the acting CFO and works with the accountants in the preparation of financial statements.
Two other senior-level coworkers have noticed a change in Tom’s lifestyle and have become concerned regarding the source of his finances. He shows up to work in expensive vehicles, brags about his lavish weekend trips, and his choice in work attire has certainly upgraded over the past year. His coworkers are concerned because net profit is down and the firm keeps committing to large supply contracts with the same vendor. When confronted in a meeting, Tom is argumentative and dismissive, which are characteristics not seen from the Tom his coworkers have grown to respect.
The firm hires you to conduct an investigation into this. Below is a general outline of Tom’s spending for the year:
- In Excel, use the data below to create a Form 4822 similar to the one in Figure 6.2 of your textbook to determine Tom’s living expenses.
- Analyze the data and form an opinion on Tom’s spending.
- Is there enough evidence to determine that a fraud may be taking place?
- What areas within the company can you look at to determine whether fraud has occurred?
Total Yearly Gross Income: $130,000.00
Groceries and outside meals: $18,000
Clothing: $15,000
Laundry dry cleaning: $500
Education: $750 (student loans)
Recreation, entertainment, vacations: $25,000
Subscriptions: $750
Gifts and allowances: $6,000
Life and accident insurance: $1,800
Federal taxes: $30,000
Rent or mortgage: $3,500/month
Utilities: $3,750
Domestic help: $0
Home insurance: $1,500
Repairs and improvements: $5,000
Child care: $0
Gasoline, oil, grease, wash: $1,500
Tires, batteries, repairs, tags: $2,000
Insurance: $3,000
Auto payments (including interest): $0
Lease of auto: $18,000
Other personal assets: $10,000
All medical expenses paid by employer’s generous health plan.
SAVE
AI-Generated Solution
info
AI-generated content may present inaccurate or offensive content that does not represent bartleby’s views.
Unlock instant AI solutions
Tap the button
to generate a solution
to generate a solution
Click the button to generate
a solution
a solution
Knowledge Booster
Similar questions
- D. The Hilal Company uses a responsibility reporting system to measure the performance of its three investment centers: A, B, and C. Segment performance is measured using a system of responsibility reports and return on investment calculations. The allocation of resources within the company and the segment managers' bonuses are based in part on the results shown in these reports. Recently, the company was the victim of a computer virus that deleted portions of the company's accounting records. This was discovered when the current period's responsibility reports were being prepared. The printout of the actual operating results appeared as follows. A Service revenue 24 $450,000 $ ? Variable costs 5,000,000 320,000 Contribution margin 180,000 380,000 Controllable fixed costs 1,500,000 Controllable margin 70,000 176,000 Average operating assets 25,000,000 1,600,000 Return on investment 12% 10% Instructions Determine the missing pieces of information above.arrow_forwardThe Carla Vista Burkett Company uses a responsibility reporting system to measure the performance of its three investment centers: Planes, Taxis, and Limos. Segment performance is measured using a system of responsibility reports and return on investment calculations. The allocation of resources within the company and the segment managers' bonuses are based in part on the results shown in these reports. Recently, the company was the victim of a computer virus that deleted portions of the company's accounting records. This was discovered when the current period's responsibility reports were being prepared. The actual operating results appeared as follows. Determine the missing amounts. (Round Return on Investment to 1 decimal place, e.g. 52.7%.) Service revenue Variable costs Contribution margin Controllable fixed costs Controllable margin Average operating assets Return on investment $ Planes 5,018,000 1,518,000 25,018,000 12% Taxis $459,000 $ 189,000 79,000 10% Limos 329,000 389,000…arrow_forwardThe Medford Burkett Company uses a responsibility reporting system to measure the performance of its three investment centers: Planes, Taxis, and Limos. Segment performance is measured using a system of responsibility reports and return on investment calculations. The allocation of resources within the company and the segment managers' bonuses are based in part on the results shown in these reports. Recently, the company was the victim of a computer virus that deleted portions of the company's accounting records. This was discovered when the current period's responsibility reports were being prepared. The printout of the actual operating results appeared as follows. 3 # E D Determine the missing pieces of information. Format all dollar amounts with $, commas, and zero decimal places. Format percentages with % and zero decimal places. F3 + C Service revenue Variable costs Contribution margin Controllable fixed costs. Controllable margin Average operating assets Return on Investment F4 4…arrow_forward
- Company B uses a responsibility reporting system to measure the performance of its three investment centers: Planes, Taxis, and Limos. Segment performance is measured using a system of responsibility reports and return on investment calculations. The allocation of resources within the company and the segment managers’ bonuses are based in part on the results shown in these reports.Recently, the company was the victim of a computer virus that deleted portions of the company’s accounting records. This was discovered when the current period’s responsibility reports were being prepared. The printout of the actual operating results appeared as follows. Planes Taxis Limos Service revenue $ ? $450,000 $ ? Variable costs 5,000,000 ? 320,000 Contribution margin ? 180,000 380,000 Controllable fixed costs 1,500,000 ? ? Controllable margin ? 70,000 176,000 Average operating assets 25,000,000 ? 1,600,000 Return on investment 12% 10% ? InstructionsDetermine the missing pieces…arrow_forwardThe Ferrell Transportation Company uses a responsibility reporting system to measure the performance of its three investment centers: Planes, Taxis, and Limos. Segment performance is measured usinga system of responsibility reports and return on investment calculations. The allocation of resources within the company and the segment managers' bonuses are based in part on the results shown in these reports. Recently, the company was the victim of a computer virus that deleted portions of the company's accounting records. This was discovered when the current period's responsibility reports were being prepared. The printout of the actual operating results appeared as follows. Determine the missing pieces of information below. (Round intermediate calculations and final answers to 0 decimal places, eg. 1,255.) Planes Taxis Limos Service revenue 24 $504,700 $4 Variable costs 5,502,300 296,900 Contribution margin 255.000 485 420arrow_forwardAscendex Sdn Bhd is an online company that supplies a range of IT products. Its product line includes IT hardware and software. Their main customers are government agencies and private company. The company employs a combination of manual procedures and a networked accounting system with distributed terminals in several departments. After years of satisfactory performance, however, Ascendex Sdn Bhd is now experiencing operational inefficiencies and accounting errors. Your firm has been hired to evaluate Ascendex’s business processes and internal controls. Ascendex’s expenditure cycle is described in the following paragraphs. PURCHASE SYSTEM PROCEDURES Ascendex’s transactions are initiated when the purchasing department clerk reviews the inventory file for items that need to be replenished. The clerk selects a vendor, adds a record to the digital purchase order (PO) File, and prints four hard copies of the PO. One copy is filed in the department; the second copy is sent to the receiving…arrow_forward
- 1. A new system's development project is being planned for Reindeer Christmas Supplies Company. The invoicing, cash receipts, and accounts payable modules are all going to be updated. The controller, Kris K. Ringle, is a little anxious about this project. The last systems development project that affected his department was not very successful, and the employees in the accounting department did not accept the new system very well at first. He feels that the systems personnel did not interact sufficiently with the users of the systems in the accounting department. Prepare a memo from Ringle to the head of the information systems department, Sandy Klaus. In this memo, provide some suggestions for including the accounting personnel in the systems development project. Give persuasive arguments as to why prototyping would be helpful to the workers in the accounting department.arrow_forwardCASE:Outsourcing Accounting FunctionsYou have been employed for two years in the accounting department of a mid-sized multinational consumer products company. Your performance has been outstanding, and it is clear that management feels you have great potential with the firm. However, you are quite surprised when your manager calls you into her office to tell you that you have been chosen to lead an effort to identify an outsourcing partner for the payroll, accounts payable, and accounts receivable functions. She assures you that there will be an excellent assignment for you after the outsourcing is successfullycompleted and all is functioning well in one to two years. Questions: 1.What benefits might your organization gain from outsourcing basic accounting functions? 2. .Identify at least three major organizational challenges associated with transitioning these functions to an outsourcing firm.arrow_forwardAfter finishing your accounting degree, you joined an accounting firm. This is a medium-size accountingfirm with a reasonable range of clients. You are in an engagement meeting with one of your clients, andyour client's management raises some concerns. In particular, the management is concerned that theaudit tests that you perform will disrupt operations. Your client has recently implemented a datawarehouse. The management suggests that you draw the data for analytical reviews and substantivetesting from the data warehouse instead of the operational database. Further, the management pointsout that operational data are copied weekly into the data warehouse, and all data you need are containedthere.Required: Based on the given scenario, outline your response to the management's proposal and mentionany concerns you might have.arrow_forward
- Your answer is partially correct. As a new intern for the local branch office of a national brokerage firm, you are excited to get an assignment that allows you to use your accounting expertise. Your supervisor provides you with the spreadsheet below, which contains data for the most recent quarter for three companies that the firm has been recommending to its clients as "buys." Each of the companies' returns on assets has outperformed their industry cohorts in the past. But, given recent challenges in their markets, there is concern that the companies may experience operating challenges and lower earnings. (All numbers in millions, except return on assets.) Company Sprint Nextel Washington Mutual E* Trade Financial Fair Value of Company $36,351 11,582 Loss on Impairment Account Titles and Explanation Goodwill 1,628 eTextbook and Medial Book Value (Net Assets Including Goodwill) $51,201 23,941 4,024 Carrying Value of Goodwill $30,618 9,052 2,015 (c) Estimate the amount of goodwill…arrow_forwardThe desire to maximize profits can work against racial and other types of discrimination. To see why, consider two equally productive accountants named Ted and Jared. Ted is black, and Jared is white. Both can complete 10 audits per month. Instructions: Enter your answers as a whole number. In part b, round your answer for profit rate to 1 decimal place. a. Suppose that for any accounting firm that hires either Ted or Jared, all the other costs of performing an audit (besides paying either Ted or Jared) come to $1,000 per audit. If the going rate that must be paid to hire an accountant is $7,000 per month, how much will it cost an accounting firm to produce one audit if it hires either Ted or Jared to do the work? $1,700 b. If the market price that accounting firms charge their clients for an audit is $1,800, what would the accounting profit per audit be for a firm that hired either Ted or Jared? $ 100 What is the profit rate as a percentage? 5.88 percent c. Suppose that firm A…arrow_forwardYou have joined the companies finance team couple of months ago and went through a series of on job rotation and training. Today, the team welcomes a new member and your supervisor asks you take care of the new employee’s onboarding to the team. In particular, your supervisor asks you to tackle the following issues: 1. Describe the cash flows between a firm and its stakeholders. 2. The three fundamental decisions the finance team is concerned with, and how do they affect the firm’s balance sheet? 3. Explain why profit maximization is not the best goal for a company. What is an appropriate goal? 4. What are some of the external and internal factors that affect a firm’s stock price? What is the difference between these two types of factors? 5. Identify the sources of agency costs. What are some ways a company can control these costs? 6. Give an example of a conflict of interest in a business setting, other than the one involving the real estate agent discussed in the text.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Essentials Of Business AnalyticsStatisticsISBN:9781285187273Author:Camm, Jeff.Publisher:Cengage Learning,
Managerial Accounting: The Cornerstone of Busines...AccountingISBN:9781337115773Author:Maryanne M. Mowen, Don R. Hansen, Dan L. HeitgerPublisher:Cengage Learning
Financial Accounting: The Impact on Decision Make...AccountingISBN:9781305654174Author:Gary A. Porter, Curtis L. NortonPublisher:Cengage Learning
Essentials Of Business Analytics
Statistics
ISBN:9781285187273
Author:Camm, Jeff.
Publisher:Cengage Learning,
Managerial Accounting: The Cornerstone of Busines...
Accounting
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Cengage Learning
Financial Accounting: The Impact on Decision Make...
Accounting
ISBN:9781305654174
Author:Gary A. Porter, Curtis L. Norton
Publisher:Cengage Learning