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ACC556 Week 5 Individual

ACC556 Week 5 Individual - You are the investigator...

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You are the investigator assigned to Apollo Shoes. Based on the nature of the company and the evidence provided to you, you must determine which financial statement fraud schemes would likely be present in the company. Resource: Apollo Shoes Casebook Identify potential financial statement fraud schemes by using the Apollo Shoes Casebook. Describe the types of evidence you would look for to determine whether fraud is occurring. Write a business brief of no more than 1,050 words that outlines how you will use the substantive procedures discussed in Weeks Three and Four to analyze potential schemes. Statement on Auditing Standards No. 99 i (“SAS 99”) requires auditors to focus on two broad areas of fraud: (i) fraudulent financial reporting and (ii) misappropriation of assets. Each of these has a multitude of fraud schemes. Fraud schemes can be grouped in various categories. For example, from a legal perspective, frauds can be distinguished between: frauds by the corporation and frauds against the corporation . Frauds committed by the corporation carry legal risk, that is, potential civil, regulatory, and criminal liability. Frauds committed against the corporation carry financial risk, that is, the loss of income or assets. External and internal misappropriations of assets are by far the most common fraud against the corporation. This chapter groups, Ffinancial frauds generally falinto three four broad categories: Fraudulent Financial Reporting Schemes; Misappropriation Of Assets; Revenue And Assets Obtained By Fraud and Expenditures and Liabilities For An Improper PurposeOther economic frauds and misconduct. Most auditors would consider only to the first two categories (fraudulent financial reporting and misappropriation of assets) to be financial statement frauds. The final two categories although financial in nature, are not generally considered to be financial statement frauds, as they do not impact upon the balances in the financial statements.
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The auditor should perform the following techniques when investigating revenue recognition allegations: Inquire of management and other relevant personnel as to the existence factors causing the auditor to believe the scheme exists ii ;
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