Discussion Questions (Essay Sample)

Discussion Questions
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Discussion Questions
What irregularities should a fraud examiner look for in a firm's accounts receivable area?
The first fraud that the examiner can look at is the account receivable number. This is the number that is in the balance sheet that shows the actual number of accounts that were collected. This number is estimated because the management just estimates the number of clients that owe the organization and not the actual number of accounts that were actually collected. Another fraud is evident when the valuation of accounts exceeds the estimate of the accounts collected. This is because there are no cash which is collected on account. This may cause the management to fill in a false in excess sales by creating ghost customers and filling in false sales.
For large organization the companies mainly relies on statistical sampling which do not give the exact collectable accounts but gives an estimate (Elmaleh, 2006).
What irregularities should a fraud examiner look for in a firm's fixed assets?
Generally accepted accounting principles usually allow various methods of important life of assets and depreciation that is usually estimates thus causing the management to appear much more profitable than it is by understating the expenses involved in depreciation.
Another thing that the examiner may look at is the overstating of the useful life of assets by the understatement of the expenses that are associated by depreciation. This may also be a as result of the management staff overstating the assets by keeping the non functional assets in the balance sheet. This will also cause overstatement of the net income since there is no record of loss in the disposal of these obsolete assets (Elmaleh, 2006).
What is pay-and-return scheme? List three examples of how this type of fraud can be committed.
A pay and return scheme is whereby an employee will continuously embezzle money from an organization by creating ingenious ways to defraud.. Some of the examples of a pay and return scheme are: (1) A dishonest employee makes an overstatement to a vender and as a result the employee will go home with a subsequent refund. (2)Another situation is whereby the payments that are owed to a vendor are are fraudulently mis handled by the employee and are paid to the wrong client or buys excess goods or services.(3)An employee may also over bill the invoice of the vender and create a n invoice that was paid already (Gary, 2011).
What is a pass-through scheme and how does it differ from a typical shell company?
In pass trough scheme is whereby a shell company is started by an employee who will by good and services for the company. The dishonest employee then will convert the mark up for his or her own benefit after the employee shell company has sold the good to the employer.
A shell company scheme mainly deals on where a dishonest employee will defraud a business by submitting false invoices, rely on false and have a self approval of fraud invoices (Gary, 2011).
What is an" unconcealed larceny" scheme?
This is a scheme where a dishonest employee may embezzle the company assets without covering up the accounting books. Unconcealed larceny can greatly affect the company productivity because of it nature. Most of the employee who steal these company assets are the most trusted and in high managerial positions. There is some of measure that a company can take so as to minimize the theft in company assets. A company can segregate the duties that are involved in purchasing and in the requisitioning. A company can also conduct inventory counts regularly by an independent body that is not concerned with purchasing or other warehouse functions (Dustin, 2009).
What is meant by the term physical padding?
Physical padding in accounting and bookkeeping refers to false entries in financial accounts, mainly in the expense accounts. Fraudulent activities may take place in the form of falsified entries, for example, providing false expenses of labor.
What is shrinkage?
This ...