WGU C254 Topic 4 Rated 100% Correct!!

Which are the two most commonly manipulated to perpetrate financial statement fraud? - Revenues and Accounts Receivable SAS 99 requires auditors to assume there are material misstatements in revenue, though realizing there are situation-specific methods to recognize revenue and interpret the associated rules. - True Barry Minkow (a convicted fraudster) said: "Receivables are a wonderful thing - you create a receivable and you have ________________." - Revenue Stuffing distribution channels with promises to take back excess inventory free of charge directly violates GAAP revenue recognition rules. - True Understating the Allowance for Doubtful Accounts allows fraudsters to - Overstate Receivables and Net Income Auditors can usually quickly detect fraud because when it's committed, it's obvious. - False Most of the time only symptoms, indicators and red flags are observable Symptoms involving activities, relationships, or unusual events (too big, too small, off-season, etc.) are part of which fraud symptom category? - Analytical Symptoms Changes in behavior can be an excellent indicator of a first-time offender of fraud. - True Which of the following are considered Control Fraud Symptoms? a. Management override of significant internal controls relating to the revenue cycle b. New, unusual, or large clients that appear to have bypassed usual customer-approval process c. All of the aboved. None of the above - All of the above Focusing on the changes in dollar amounts on the financial statements from period to period is the least effective method of comparisons. True or False - True