Which of the following is an example of fraudulent financial reporting? a. Compa

Question

Which of the following is an example of fraudulent financial reporting? a. Company ending inventory, while understating cost of goods soid b. The treasurer divertis customer payments to his personal due, concealing his actions by debiting an expense account, thus overstating expenses C. An employee steals inventory and the "shrinkage" is recorded in costs of goods sold c. An employee steals small tools from the company and negiects to return them; the cost is reported as a miscelaneous e. None of the above management changes inventory count tags and overstates operating expense . The client's attorney usually decides whether a formal report on the fraud investigation is necessary. If the results of the investigation were inconctusive, the attomey may not wish to incur the additional expense of a report. The attorney may request a formal report if It will be needed to: a. refer to during restitution negotiations and/or fie an insurance claim. b. submit as evidence when the investigator is expected to testify at trial a help fulill a bankruptcy trustee's or examiner's responsibility to report on an investigation. d. a and b e. a, b, and c , Which of the folowing statements is NOT true? a. Typewriter fonts and ribbons cannot be compared to typewritten text on a document to determine whether It was typed on a spectfic typewriter b. Analysis of whether the paper or ink on a document was manufactured before a certain date cannot provide evidence about matters such as whether the document was backdated or whether a page was substiuted in a document. c. Forensic handwriting experts oan examine doouments for evidence of forgery d. Scientific, chemical and photographic analysis can provide evidence about whether a document was altered using additives, erasures, photocopying, etc. e. Both e and b are not true 20. requires keeping detailed records befare and afier the period to determine the umount of fraud. a. Tracing, entity. b. Invigilation, invigilation. c. Genogram, gonogram. d. Entity, entity e. Timeline, entity.

Explanation / Answer

1. Fraudulent financial reporting refers to manipulation of accounts to portray a better picture. Overstating inventory and understating cost of goods sold is an accounting manipulation.

Thus, correct option is A.

*First question has been answered as per Chegg's policy.

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