Home / Questions / You are a financial auditor and work on the ABC Building Ltd account. The Audit Partner is
You are a financial auditor and work on the ABC Building Ltd account. The Audit Partner issuspecting that the CEO (Anthony Caputo) have used financial statement fraudtechniques toinflate net income and get higher bonuses.Your Audit Partner is suspecting the following fraud schemes having been applied to inflatenet income:•ConcealedCostofGoodsSold•FictitiousRevenue•Improper AssetValuationThe General JournalYou are provided with two years of general journal data. The total balance of the two yearsof data is around $44.6 million
. The financial year start date is 1 June.Your TaskDownload the data file from vUWS to your computer. Please note that themateriality for theengagement is $100,000.It is also important to note that bookkeeping is regularly done onweekends.Analyze the general journal using thevarious tools and features in Excelspecificallyaddressing the above mentioned fraud schemes. Identify no more than 25 transactionsthatwould need to be investigated further.From these transactions narrow down and specificallyidentify transactionsthat you suspect have been applied to inflate income under the three fraudschemes stated above.SubmissionYou will submit a brief report on vUWS in word.
The report should have at minimum thefollowing sections:•Introduction–Provide a brief introduction to the audit engagement and your task.•Procedures/methods–Outline the procedures that you undertook to identify thefraudulent transactions.•Findings–In this section present the findings of your analysis of the GL of the auditclient. Specifically identify and explain the transactions that you suspect have beenapplied to inflate income under thethree fraud schemes-ConcealedCostofGoodsSold, FictitiousRevenue and Improper AssetValuation.•Appendix–Present the journal entries that you have identified in your findings section.Copy and paste the journal entries from the excel data file into the appendix section.Journal entries are to be presented under the relevant fraud schemes
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