Spring2009 Exam I solution

Spring2009 Exam I solution - ACCTG 321 Exam I Spring, 2009...

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ACCTG 321 Exam I Spring, 2009 Solution I.A. (1) Sales Invoice Customer name and address Product code or number Customer account number Product description Customer order number Quantity ordered Salesperson code Quantity shipped Shipping Address Unit price Shipper and date shipped Extended price Terms of sale Taxes, if applicable Total Amount due (2) Receiving Report Vendor name Vendor number Vendor address Date received Shipper Receiving clerk number Quantity received Part number received Description/quality remarks Purchase order number Inspected by B. (1) Fraud encompasses an array of irregularities and illegal acts characterized by intentional deception. It can be perpetrated for the benefit of or to the detriment of the organization and by persons outside as well as inside the organization. 1
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(2) High personal debts or great financial losses. Expensive lifestyle. Extensive gambling or use of alcohol or drugs. Heavy investments. Significant personal or family problems. Rewriting records, under the guise of neatness. Refusing to leave custody of records during the day. Extensive overtime. Skipping vacations. Questionable background and references. Feeling that pay is not commensurate with responsibilities. Strong desire to beat the system. Regular borrowing of small amounts from fellow employees. Personal checks returned for insufficient funds. Collectors and creditors appearing at the place of business. Placing unauthorized IOUs in petty cash funds. Inclination toward covering up inefficiencies or "plugging" figures. Pronounced criticism of others. Association with questionable characters. Annoyance with reasonable questions; replying to questions with unreasonable answers. Unusually large bank balance. Bragging about exploits. Carrying unusually large amounts of cash. (3) 1. Inspecting the documentation supporting the release of a check to a vendor. 2. Tracing all payments back to the supporting documentation. The receiving department would have no record of the receipt of the goods. The purchasing department would have no record of having ordered the materials or of having such materials requested. 2
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C. (1) The following situational pressures in a public company increase the likelihood of financial statement fraud: Sudden deceases in revenue or market share. Financial pressure from bonus plans that depend on short-term economic performance
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Spring2009 Exam I solution - ACCTG 321 Exam I Spring, 2009...

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