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The management team records improper counts. If this procedure is performed, it is most likely to occur on inventory perceived less likely to be counted or with a planned reason for the false count. In this way, the auditor will view the false count as an intentional error versus an intentional plan to misstate the inventory. The auditor needs to ensure that management has no record of the test counts...
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I warned investors that Utah-based multi-level marketing company Nu Skin Enterprises' (NYSE: NUS) surging inventory levels might lead it "to recognize a material impairment charge against inventory in a future period." On August 4, 2014, in a follow-up blog post co-authored with Zac Prensky, we warned investors about a massive inventory pile up in Mainland China..
We have been known to refer to “inventory” as the dirtiest word in business. Certainly inventory presents one of the great management challenges, and one of the great valuation mysteries when considering a company for investment. Annual reports and financial statements estimate the value of inventory on hand, but the number cannot always be taken at face value...
This presentation provides excellent brief on Revenue- and Inventory-Related Financial Statement Frauds...
Inventory is one of the biggest assets on a manufacturer’s balance sheet. It’s also one of the hardest assets to measure and track. Thousands of transactions flow through the inventory account each year — and many of these journal entries require subjective estimates, such as overhead allocations, write-offs and valuation adjustments. In addition, many employees have direct daily access to inventory or inventory accounting records, providing an ongoing temptation to steal or cook the books....
Just a hint of inventory fraud can be a frightening experience for an auditor of financial statements. Indeed, the list of freakish inventory manipulations companies have committed over the last 50 years reads like a rogue’s gallery: McKesson and Robbins, the Salad Oil Swindle, Equity Funding, ZZZZ Best, Phar-Mor. The tried-and-true schemes these and other companies pulled have always given auditors nightmares. A CPA who recognizes how these fraudulent manipulations work will be in a much better position to identify them....
The Association of Certified Fraud Examiners conducted a substantial study to classify occupational fraud cases. The recent edition published in 2010 presented updated descriptive statistics on the occurrence, damages, and so on of occupational fraud. The schemes discussed in this section are the common schemes reported in that study. Further details on the schemes and methods of prevention and detection are available on ACFE’s publication. The following sections present a brief description of the common fraud schemes and ways to detect and deter them....
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Audit, Finance, Forensic Accounting, Forensic Audit, Fraud Risk Management, IFRS, IAS, International Accounting Standard, International Financial Reporting Standard, International Standard on Auditing, ISA, accounting fraud, ANTI FRAUD COLLABORAtion, Risk assessment, Control Self-Assessment, CPA, CA, Risk Identification, CIMA Study, ACCA Study, ICAEW Exam, ICAEW Study, CISAStudy, CA Study, IFRS Exam, IFRS Study, CPA Study, COSO, Risk Mitigation, Risk Monitoring, Control Environment, Financial Statement, Balance Sheet, Profit and Loss Statement, Financial Closing, Financial Statement Assertion, SOX Implementation, Accounting Software, ERP, Trial balance, Revenue Recognition, Issue Tracking, Key Risk Indicator, Key Incident Reporting, CPA Exam, ACCA Exam, CA Exam, CISA Exam, DISA Exam, Accounting Exam, CIMA Exam, IIA Exam, CFE Exam |
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