MGMT 642 Chapter 12

understated revenues and understated net income are among the most common typess of FS fraud
True False

2 of the reasons revenue-related FS fraud is so prevalent are bc revenue recognition can be highly subjective and because revenue is so easily manipulated
True False

preforming a horizontal analysis of the stmt of cash flows is an excellent way to proactively search for revenue-related FS fraud
True False

teh most common accounts manipulated when perpetrating FS fraud are revenues and or accounts recievable
True False

an increase in gross margin and an increase in number of days' sales in inventory could be an indication of inflated inventory fraud
True False

a "sales discounts" amount taht appears to low could be a fraud symptom
True False

comparing fiancial results and trends of a company with those of similar firms is an ineffective way to look for fraud symptoms
True False

focusing on changes in fs from period to period can help identify analytical fraud symptoms
True False

controls over inventory shoudl be closely examined when searching for fraud symptoms
True False

the gross profit margin ratio is calculated by dividing gross profit by cost of goods sold
True False

working capital turnover ratio is calculated by dividing avg working capital by sales
True False

AR turnover is one of the most widely used ratios to analyze revenues and is a measure of the efficiency with which receivables are being collected
True False

one of the most practical ways to look for analytical symptoms of fraud are to focus on changes and comparisons within and from the FS
True False

teh most common accounts manipulated when perpetrating FS fraud are:

why might a company want to understate net income?

reported revenue and sales account balances that appear too high are examples of:

horizontal analysis is a method that:

adding fictitious receivables will ususally result in an:

comparing recorded amounts in the FS with the real world assets they are supposed to represent would be the most effective in detecting:

lifestyle symptoms are most effective with:

Which of the followingis not an inventory-related documentary symptom?

when looking foer inventory fraud, an important question to ask is:

Which of the following ratios would not generally be used to look for inventory and COGS related frauds

in order to analyze Fs for fraud, an auditor or fraud examiner should consider all of the following except:

last-minute revenue adjustments, unsupported BS amts, and improperly recorded revenues are examples of:

accounts that can be manipulated in revenue fraud include all of the following except:

which financial ratio is not useful in detectingrevenue related fraud?

teh asset turnover ratio measures:

the most common way to overstate revenuesis to:

Which of the following is a possible scheme for manipulating revenue when returned goods are accepted from customers?

all of the following ratios are useful in detecting large revenue frauds except:

each of the following illicit revenue transactions is correctly linked with the FS accounts involved except:

identify which ratio is correctly linked to the information it could reveal about the company's potential for revenue fraud?

Which of the following is a common way to perform FS analysis while searching for revenue-related analytical symptoms?

Primarily occuring at the end of teh year in an attempt to inflate sales, the practice of shipping more items to distributors than they can sell in a reasonable time period is known as: