FOR3703 October/November 2024 | Due 31 October 2024

Description

FOR3703 October/November 2024 | Due 31 October 2024. All questions answered with multiple essays. PORTFOLIO QUESTIONS
This is an essay-type question and all questions must be answered in one essay.
Scenario
Financial statement fraud is a white-collar crime usually perpetrated by management insiders to present a company in a favourable fiscal light. Fraudsters are motivated by personal gain such as performance-based compensation for the enhancement of company’s reputation by misleading potential investors. Or they want to buy time to correct their financial mistakes or recoup their losses.
Financial statement fraud is a crime of opportunity. Companies with lax internal controls, manual accounting systems or dishonest and overly aggressive leaders are more likely to fall prey to it. The key to combating financial statement fraud is to prevent it from ever happening. If it cannot be prevented, it must be found as soon as possible.
Based on the information in the case study, answer the following questions:
1.1. Discuss the different types of financial statement fraud and explain why company personnel commit it. Also indicate how financial statement fraud red flags can signal potential fraudulent practices. (50)
1.2. Discuss the methods to detect and prevent financial statement fraud. (50)
TOTAL: [100]