Discussion Questions
ACC/491 Contemporary Auditing I
1. What are some of the specific risks area of fraud?
3. can you identify risks associated with the IT system at your place of employment? Do you have any? If so, what are the risks?
4. internal control vs auditing
5. different types of fraud
6. respective responsibilities–management’s and the auditor’s–for addressing fraud
7. different types of fraud
8. auditing or fraud
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ACC/423 Intermediate Financial Accounting III
1. Message expanded.Message readChanges in Accounting Principle vs Changes in Accounting Estimate
2. Why would a company change accounting principles? Can you give an example?
3. Why do accountants make errors? What types of errors can occur? Why is it necessary to correct them?
4. What are the benefits to an organization when accountants make changes to accounting methods?
5. Message expanded.Message readDirect/Indirect Effects of Changes
6. Message expanded.Message readProspective Reporting of Changes in Accounting Estimates
7. How does the reader of the financial statements know if there was a change in accounting estimates?
8. What happens when an error causes the financial statements to be materially misstated?
Solution Preview
ACC/491 Contemporary Auditing I
- Risk areas of Fraud
Fraud is most likely going to be discovered in the vulnerable parts of the company. The most common risk areas relative to fraud occurrence include the purchasing department, where an employee or management may initiate a purchase order for goods meant for own use, personal use of corporate credit cards rather than for work-related activities. A third and common risk area is in payroll where ‘ghost’ workers are set up and paid for ‘ghost’ work, which in some cases includes falsified overtime (Donald, 1953).
- Fraud Triangle
The triangle is a model meant to decipher the motives responsible for an employee to commit fraud. The model identifies three main realms in which workplace fraud decisions are made;
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