Assignment task: Need help with all questions:
Task 1: Review Questions
Q1. What is financial statement?
Q2. List five different ways in which financial statement fraud can be committed.
Q3. What are the two methods of engaging in fictitious revenues?
Q4. What are the two most common pressures and motivations for committing financial statement fraud?
Q5. List three methods of engaging in timing differences.
Q6. What is the motivation for violating the generally accepted accounting principle of matching revenues with expenses? What is the result of committing this fraud?
Q7. What is the motivation for early revenue recognition? What is the result of engaging in this type of fraud?
Q8. List the three common methods for concealing liabilities and expenses.
Q9. What is the motivation for concealing liabilities and expenses?
Q10. List five common categories of improper disclosures.
Q11. What are the four common forms of improper asset valuation?
Q12. What is the likely result of committing an improper asset valuation?
Q13. What is the difference between fraudulent financial reporting and misappropriation of assets?
Q14. Describe three analytical techniques for financial statement analysis.
Task 2: DISCUSSION ISSUES
Q1. What is the most effective way to prevent fictitious revenue from being fraudulently reported in the financial statements?
Q2. How can fictitious revenue be created through the use of false sales to shell companies? Discuss the method and result of committing this fraud.
Q3. How might a company use timing differences to boost revenues for the current year? Discuss and analyze the method and result of committing the fraud.
Q4. In the case study, "The Importance of Timing," what kind of fraud did the accountant commit? How could this fraud have been discovered?
Q5. Liability/expense omission is the preferred and easiest method of concealing liabilities/expenses. Why? Discuss how to detect this type of fraud.
Q6. What internal control activities and related test procedures can detect or deter overstated inventory?
Q7. What financial reporting analysis techniques can help to detect fraudulent financial statement schemes?
Q8. In the case study "That Way Lies Madness," what kind of fraud did Eddie Antar commit? How was the fraud committed? How could such fraud be discovered?
Q9. During the audit of financial statements, an auditor discovers that financial statements might be materially misstated due to the existence of fraud. Describe (1) the auditor's responsibility according to AU 240 for discovering financial statement fraud, (2) what the auditor should do if he is precluded from applying necessary audit procedures to discover the suspected fraud, and (3) what the auditor should do if he finds that the fraud materially affects the integrity of the financial statement