WGU C254

Most economists agree that __________ and _________ were the root causes of the economic downturn. - - sub-prime mortgages - other risky financial instruments Financial statements prepared by organizations play an important role in keeping America's markets efficient, what do financial statements provide? - - meaningful disclosures of: ---where a company has been ---where it is currently ---where it is going Financial statement fraud is also referred to as ______________. - - management...

If _____________ is understated, then ________________ will directly be overstated (less tax effect). - Cost of Goods Sold, Net Income Cost of goods sold can be understated by overstating ending inventory. True or False - True There are over 15 ways of manipulating cost of goods sold. To what end does a fraudster usually do this? - Increase Net Income "Reported cost of goods sold balances that appear too low or are not increasing fast enough" is what type of symptom? - Analytical "Unu...

Perpetrator- Management of a company Victim- Shareholders and/or debt-holders and regulators Most expensive type of fraud - Management Statement fraud Which legal code makes the bribing of public officials illegal? - Title 18, US. Code Section 201 Perpetrator- Customers of an organization Victim- The organization which sells to customers Customers don't pay, pay too little, or get too much from the organization through deception - Customer Fraud Perpetrator- Vendors of an organization ...

America's capital markets are the envy of the world because of their efficiency, liquidity, and resiliency. What role do financial statements play in American capital markets? - They present a fair picture of the financial position and results of the organization Why are American financial statements so widely trusted? - They are prepared with integrity and there is a system that checks all published statements. The SEC views auditors of public companies as "unreliable and frequently inco...

Which action is potentially unethical because it understates COGS? A. Understating purchases B. Understating purchase returns C. Understating ending inventory D. Understating purchase discounts - A Why is it unethical for a supervisor to ask an accountant to capitalize the marketing research program? A. this action overstates assets B. this action overstates expenses C. this action understates liabilities D. this action understates net income - A How can financial statement fraud impa...

In the past (early 20th century time-frame), what was the general consensus of the principal purpose of audits (including among auditors)? To detect fraud To certify for the public that management is qualified to run the entity To evaluate that companies follow GAAP Investigative and analytical purposes - To detect fraud Why has there been so much frustration between the general public and auditors regarding fraud detection? The auditors were not sufficiently trained in GAAP rules and re...