Fraud Financial Statement Example

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Financial Statement Fraud The auditor will focus on the red alerts that have been cited to point out to the probability that there is a case of fraud in the organization. The auditor will, through the memo, make it clear to the employees that indications of fraud and the steps that will be taken in relation to citing the scam in the instances it occurred. The red flags will be clearly cited in the memo. Through the red flags, the employees will comprehend the shortcomings associated with the company operations. Fraud misrepresentation of figures in financial accounting or management of finances intended at personal gain. Fraud can also be regarded as a misrepresentation of qualities or achievements with the intention of deceiving. It …show more content…
The use of different audit firms for the assessment of the company will indicate fraud. The team will seek to detect the anomalies in the cash flow such as the inability to make cash flows from company processes while giving a report of the growth of the earnings. The audit team will analyze the invoices and cite the liabilities as well as the invoices that are not taken into the financial records of the company. The team will also assess tendencies such as the writing off loans to executives along with any other parties. The team will also focus on the citing the failure by the management to record the liabilities that are warranty-related. The auditing team will look to cite any signs of undisclosed legal unforeseen events. The team will therefore seek to cite any indications of inadequate disclosures. Asset valuation is an important component. Fraudulent inflation of the valuation of assets is way of manipulating profits that is common and is the aspect that the audit team will be looking out for as part of the ways of detecting anomalies. The audit team will seek to establish whether or not the patterns suggesting a relationship between given constituents of the financial report. The audit team will evaluate the changes in the profits that the company generates. The team will look out for the transactions made and reconcile the figures with those given from the internal audits conducted. The team will examine the company’s operations, take an account of the alleged sales made, contact the customers and verify their addresses in order to ensure that the profits presented are not approaches to cover up. The audit team will also ensure that the profit margin fluctuations are analyzed in order to detect the instances of fraud that may have

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