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FOR3703 OCTOBER NOVEMBER PORTFOLIO (COMPLETE ANSWERS) Semester 2 2024 - DUE 31 October 2024; 100% TRUSTED Complete, trusted solutions and explanations. R49,94
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FOR3703 OCTOBER NOVEMBER PORTFOLIO (COMPLETE ANSWERS) Semester 2 2024 - DUE 31 October 2024; 100% TRUSTED Complete, trusted solutions and explanations.
FOR3703 OCTOBER NOVEMBER PORTFOLIO (COMPLETE ANSWERS) Semester 2 2024 - DUE 31 October 2024; 100% TRUSTED Complete, trusted solutions and explanations.
, FOR3703 OCTOBER NOVEMBER PORTFOLIO
(COMPLETE ANSWERS) Semester 2 2024 - DUE 31
October 2024; 100% TRUSTED Complete, trusted solutions
and explanations.
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)
Types of Financial Statement Fraud
1. Revenue Recognition Fraud:
o Description: Inflating revenues by recognizing sales
that have not yet occurred or manipulating the timing
of revenue recognition.
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