Chat with AI
Auditing and Assurance Services 1st Edition by Iris Stuart
Edition 1ISBN: 978-0073404004Auditing and Assurance Services 1st Edition by Iris Stuart
Edition 1ISBN: 978-0073404004 Exercise 9
WorldCom
The WorldCom fraud described in the chapter involved a simple earnings manipulation through which the company capitalized expenses to increase net income. This transaction was recorded by a journal entry to debit capital assets and credit expenses.
a. Describe the substantive audit procedures that an auditor could use to determine whether financial statements are misstated by capitalizing expenses.
b. Identify analytical procedures that could have helped the auditor identify the risk of fraud at WorldCom.
The WorldCom fraud described in the chapter involved a simple earnings manipulation through which the company capitalized expenses to increase net income. This transaction was recorded by a journal entry to debit capital assets and credit expenses.
a. Describe the substantive audit procedures that an auditor could use to determine whether financial statements are misstated by capitalizing expenses.
b. Identify analytical procedures that could have helped the auditor identify the risk of fraud at WorldCom.
Explanation
Verified
Verified
Misstatements in the process of acquisit...
Auditing and Assurance Services 1st Edition by Iris Stuart
Why don’t you like this exercise?
Other Minimum 8 character and maximum 255 character
Character 255
