Fraud Case 4.1 - Fraud Case 4.1 Arthur Chen a newly minted CPA was on his second audit job in the Midwest with a new client called Parson Farm Products

Fraud Case 4.1 - Fraud Case 4.1 Arthur Chen a newly minted...

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Fraud Case 4.1 Arthur Chen, a newly minted CPA, was on his second audit job in the Midwest with a new client called Parson Farm Products. He was looking through the past four years of financials and doing a few ratios when he noticed something odd. The current ratio went from 1.9 in 2011 down to 0.3 in 2012, despite the fact that 2012 had recorded income. He decided to sample a few transactions from December 2012. He found that many of Parson’s customers had returned products to the company because of substandard quality. Chen discovered that the company was clearing the receivables (i.e., crediting accounts receivable) but “stashing” the debits in an obscure long-term asset account called “grain reserves” to keep the company’s income “in the
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  • Winter '17
  • salman pracha
  • Accounting, Balance Sheet, Financial Ratio, Generally Accepted Accounting Principles, newly minted CPA, Parson Farm Products

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