What does Dex shuffling refer to? “Dex shuffling” refers to:
changing the publication dates on telephone directories to inflate revenue
.
What is the practice in which cash receipts are misapplied to hide fictitious receivables called?
What is the practice in which cash receipts are misapplied to hide fictitious receivables called?
When examining whether a company has Underrecorded accounts payable all of the following ratios are helpful except?
What is the effect on the cost of goods sold account when the inventory account is overstated?
Is lapping a form of corruption?
Key Takeaways.
A lapping scheme is a form of accounting fraud
whereby stolen or misappropriated cash is obscured by an employee who altes the accounts receivable.
Why is larceny is easier to detect than skimming?
Larceny is easier to detect than skimming because: a.
larceny involves fraudulent disbursements of cash, while skimming involves fraudulent receipts of cash
.
What are the three major classes of asset misappropriation?
What are the three major classes of asset misappropriation?
Stealing receipts, disbursement fraud, and stealing assets on hand
.
When accounts payable-related liabilities are understated,
purchases and inventory are often, or the financial statements don’t balance
.
What is asset misappropriation?
Asset misappropriation can be defined as
using company or client assets for personal gain
. This is also known as “stealing.” There are two main categories of asset misappropriation: cash and noncash.
What did Sunbeam do wrong?
Sunbeam
improperly recognized revenue on a purported sale of parts inventory
. Also in the fourth quarter of 1997, Sunbeam recorded $11 million in revenue and almost $5 million in income from a “sale” of its spare parts inventory to a fulfillment house that did not comply with GAAP requirements.
What is a big bath charge off?
Big Bath in accounting is
an earnings management technique whereby a one-time charge is taken against income in order to reduce assets
, which results in lower expenses in the future.
What is a big bath in an analysis setting?
A big bath is an accounting term that is defined by
a company’s management team knowingly manipulating its income statement to make poor results look even worse in order to make future results appear better
.
Does overstating ending inventory affect profit?
Overstatements of ending inventory result in understated cost of goods sold,
overstated net income
, overstated assets, and overstated equity. Conversely, understatements of ending inventory result in overstated cost of goods sold, understated net income, understated assets, and understated equity.
What happens when inventory understates?
If inventory is understated at the end of the year, it means that
the amount of inventory being reported is less than the true or correct amount
.
How do you know if inventory is overvalued?
Calculate the price-to-earnings ratio of a stock option by dividing the price of a share by the earnings per share and then compare that to the growth rate.
If the P/E ratio is higher than the growth rate, the stock may be overvalued
.
What is the difference between lapping and kiting?
What is the difference between skimming and larceny?
What is check kiting and lapping?
How cash larceny can be concealed?
A method used to conceal cash larceny.
The perpetrator processes false transactions to void a sale or to refund cash
, which causes sales records to reconcile to the amount of cash on hand after the theft.
What are the types of cash larceny?
How can you avoid cash theft?
- Give Customers a Reward for Not Receiving a Receipt. …
- Raise Wages. …
- Use Strict Inventory Controls. …
- Don’t Let Cashiers Be Accountants. …
- Monitor for Unusual Transactions.
What are examples of asset misappropriation?
What is the most common form of asset misappropriation?
Fraudulent disbursements
are the most common form of asset misappropriation, and they occur when an employee uses his position of employment to cause a payment for some inappropriate purpose.
What are the different types of misappropriation?
Diversion (material element), Fraudulent intent (intentional) Prejudice
.
What is the most common way to overstate revenues?
Assets that are purchased with each dollar of sales. The most common way to overstate revenues is to: A.
Record revenues prematurely
.
How is a contingent liability reported if it is considered reasonably possible?
When trying to identify outliers what is one of?
When trying to identify outliers, what is one of the best statistical approaches?
The z-score calculation
.
What is another name for the misappropriation of assets?
Is lapping illegal?
What is cash skimming?
Skimming is
a type of white-collar crime that involves taking cash from a business before it’s entered into an accounting system
. This is an off-book fraud because theft occurs before the money can be entered in a bookkeeping system, which in turn, never gets reported on the company’s records.
Which of the following audit procedures is the most appropriate when internal control over cash is weak or when a client requests an investigation of cash transaction?
Which of the following audit procedures would most likely detect lapping?
A practical and effective audit procedure for the detection of lapping is:
Comparing recorded cash receipts in detail against items making up the bank deposit
as shown on duplicate deposit slips validated by the bank. Which of the following is not a control that generally is established over cash receipts?
What is the purpose of internal controls smartbook?
What is the purpose of internal controls? Companies create internal controls
to protect assets and ensure reliable accounting
.
Which of the following control activities would best protect against the preparation of improper or inaccurate cash disbursements?
Understating the sales journal
. Which of the following control activities would best protect against the preparation of improper or inaccurate cash disbursements? All signed checks must be reviewed and compared with supporting documentation by the treasurer before mailing.
