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What are some examples of the different types of errors and frauds in auditing?
Wiki User
∙ 15y ago
I think a major one which happened a few years back was the Enron scandal. This is what caused the collapse of Arthur Anderson (one of what was then called the 'Big 5' accounting companies). They basically started shredding the auditing data to cover their backs but were caught out. Corporate Fraud investigations involve the following activities: (1) Falsification of financial information, including: (a) False accounting entries;
(b) Bogus trades designed to inflate profit or hide losses; and,
(c) False transactions designed to evade regulatory oversight. (2) Self-dealing by corporate insiders, including: (a) Insider trading;
(b) Kickbacks;
(c) Backdating of executive stock options;
(d) Misuse of corporate property for personal gain; and,
(e) Individual tax violations related to self-dealing.
(3) Obstruction of justice designed to conceal any of the above-noted types of criminal conduct, particularly when the obstruction impedes the inquiries of the SEC, other regulatory agencies, and/or law enforcement agencies.
QWEST COMMUNICATIONS (DENVER): Qwest Communications (Qwest) is a Fortune 500 company and one of the largest providers of telecommunications services in the U.S. In 2000 and 2001, the company reported sales revenues of $16 billion and $19 billion, respectively, in its published financial statements. In 2002, Qwest issued a press release that acknowledged the company had improperly recorded $1.1 billion in revenue since 1999, and the FBI opened a criminal investigation. Five executives were indicted and either plead guilty or were convicted of securities fraud or insider trading. This included the former CEO Joseph Nacchio, who was convicted of insider trading on April 19, 2007. He was sentenced to six years in prison, ordered to forfeit $52 million gained as a result of his illegal stock sales, and fined $19 million.
That's just one example, you can read about different types of fraud at the FBI website - see links
Wiki User
∙ 15y ago
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Meaning of casting in auditing?
Casting: It is essential that arithmetical accuracy be checked so that frauds or errors (if any) may be detected
Differences between fraud and error?
differences between errors and frauds
Auditing is defined as accounting control?
Accounting is concerned with measurement and communication of financial events based on some established principal and procedures. Auditing, on the other hand deals with checking and confirmation of what are recorded and to be communicated. It aims at ensuring that: All transactions are undertaken in accordance with plans and procedures as laid down by management, Transactions are promptly and properly recorded so that financial statements is prepared timely and in a fair way. No frauds takes place so that assets of the business are safeguarded. So, audit is the control of the accounting system of the organization. It sees that accounting system has been designed to prevent occurance of errors and frauds and it can generate authentic and reliable financial statements. Auditing is, therefore, appropriately defined as 'Accounting control'
Disadvantages of auditing?
DISADVANTAGES 1. Frauds by management Auditing fails to check planned frauds. The management can play tricks to manipulate the accounts in order to conceal their inefficiencies. The audited accounts could not show the true view. 2. Wrong certificate Auditing is based on many certificates taken from management and other persons. Auditing may fail to provide the desired results. When certificates provides wrong information. 3. Misleading clarification Auditing fails to disclose correct information. The management may not provide correct clarification. The auditor is bound to present his report even of the clarification is not true. 4. No true picture The auditing does not present true picture. Auditing fails to disclose true picture when figures have been manipulated. 5. No correct view Auditing fails to present correct view. There are limitations of accounting so figures are not facts. These figures are based on opinion. Thus auditing is unable to disclose correct view. 6. No suggestion Auditing is not concerned with the management policies. The auditor cannot guide management for better use of capital. He is unable to suggest what should have been done. 7. Absence of honesty Honesty and independence are highly essential traits. The auditor must certify what is true. The absence of honesty and independence means failure of audit purpose. 8. Bias of auditor The auditing fails to present fair view due to bias of an auditor. It is the quality of an auditor that he should be independent. The bias auditing fails to help many people. 9. High cost The audit work is completed without cost. The cost of audit should not exceed of errors and frauds. Auditing fails to serve million of business entities. 10. Past action Auditing is nothing more than checking of past activities. It is not concerned with present or future. The audit fees increase the cost of business. Such cost does not help to improve market standing of enterprises.
What are examples of fraud jobs?
There are quite a few job frauds in the world, many of which claim that the employee will make large sums of money in a very short timespan. Some of these job frauds are actually listed as "work from home" opportunities.
When was Frauds - Soundtrack - created?
Frauds - Soundtrack - was created in 1993.
What is the duration of Frauds film?
The duration of Frauds - film - is 1.5 hours.
Importance of vouching?
vouching is the backbone of the audting because with the help of vouching all errors and frauds can be detected so that is very useful in this sense
When was Frauds - film - created?
Frauds - film - was created on 1993-06-04.
What are the release dates for Frauds - 1915?
Frauds - 1915 was released on: USA: 1 May 1915
Who committed frauds - details?
How frauds of evasion of Excise duty are detected Give illustration of a case of fraud
What is merchandise frauds?
they are your head
