Detecting Accounting Fraud

Business

Quiz 8 :

Tall Tales

Quiz 8 :

Tall Tales

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Fill in the blank with information and concepts from this chapter. An increase in the intangible asset described as "franchise acquisition rights" could be a signal that too many ____________ have been sold in the past.
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Franchise Acquisition Rights
K Incorporation had increased the franchise acquisition rights by starting more franchises. This is was one of the main signals of company's operational difficulties. Raising of franchise acquisition privileges would be a signal that more number of franchises has been sold and some of them were repurchased because they are interfering with other franchises.
Hence, the correct answer is
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Fill in the blank with information and concepts from this chapter. According to the SEC, Adelphia purchased land from members of the Rigas family in terms of a contract in which a clause stated that the ____________ rights to the land would revert back to the owner after 20 years.
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Financial Records
Financial records outline the financial activities and position of a business or entity in a structured manner.
According to Securities and Exchange Commission (SEC), Corporation A purchased 3,656 acres of land from the "Rigas family" in term of a contract. In contract, it was stated that the timber rights would revert back to the owner of the underlying land after 20 years.
Therefore, the correct answer is
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Answer the following question with T for true or F for false for more practice with key terms and concepts from this chapter. In the recording of Krispy Kreme's round- trip transactions, equipment sales were made to a franchisee shortly before the reacquisition of the franchise and the sales price of the equipment was deducted from the reacquisition cost of the franchise.
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Financial Records
Financial records outline the financial activities and position of a business or entity in a structured manner.
Examining the records of K Incorporation, it is revealed that they exposed a number of accounting errors. One of those errors is recording round-trip transactions prior to the reacquisition of the franchise in that amounts were included to the cost of reacquisition of franchise. Hence, the given statement is false.
Therefore, the correct answer is
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Fill in the blank with information and concepts from this chapter. The disclosure of related-party transac­tions should alert the user of financial statements that the transactions could be used to the ____________ company's debt, or to its earnings, or to ____________ loot the company's assets.
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Answer the following question with T for true or F for false for more practice with key terms and concepts from this chapter. BellSouth is presented in the text as an example of the improper disclosure of non-GAAP information.
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Fill in the blank with information and concepts from this chapter. Edison's practice was to report the gross amount of the fee per student as its ____________ in its income statement.
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Answer the following question with T for true or F for false for more practice with key terms and concepts from this chapter. The Management Discussion and Analysis (MD A) section in the SEC filings of publicly traded companies discusses the issuer's financial condition and results of operations to enhance investor under­standing of financial statements.
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Answer the following question with T for true or F for false for more practice with key terms and concepts from this chapter. According to the SEC, Adelphia's improper reporting included inaccurate non-GAAP information.
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Answer the following question with T for true or F for false for more practice with key terms and concepts from this chapter. Krispy Kreme also failed to accrue the full amount of incentive compensation expense in accordance with the company's incen­tive plan.
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Fill in the blank with information and concepts from this chapter. In the case of Edison Schools, Inc., its inad­equate disclosure did not affect the amount of net it ____________ reported.
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Fill in the blank with information and concepts from this chapter. The SOX Report defined round-trip transactions as transactions that involve simultaneous pre- ____________ sales trans­ actions, often of the same product, to create a false impression of business activity and revenue.
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Answer the following question with T for true or F for false for more practice with key terms and concepts from this chapter. One of the signals of the improper use and disclosure of related-party transactions is references in the notes to the financial statements that indicate the intermingling of a company's assets or liabilities with those of its major shareholders, officers, or directors.
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Fill in the blank with information and concepts from this chapter. The strength of the FCPA legislation lies in the requirement that companies keep accu­rate ____________ and records.
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Answer the following question with T for true or F for false for more practice with key terms and concepts from this chapter. BellSouth properly recorded and disclosed improper payments in its books and records.
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Answer the following question with T for true or F for false for more practice with key terms and concepts from this chapter. Technical compliance with GAAP in the financial statements will insulate an issuer of financial statements from enforcement actions by the SEC.
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Answer the following question with T for true or F for false for more practice with key terms and concepts from this chapter. According to the SEC's AAER 1555, Edison disclosed the existence and amount of its District-Paid Expenses, but did not prop­erly offset them from revenues.
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Answer the following question with T for true or F for false for more practice with key terms and concepts from this chapter. Krispy Kreme's internally appointed independent investigation into its business practices concluded that the company's accounting errors were intentional.
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Fill in the blank with information and concepts from this chapter. According to the SEC, Telcel recorded a disbursement in its books and records based on ____________ invoices.
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Fill in the blank with information and concepts from this chapter. In the ____________ case, the issue was that it did not accurately and completely describe the realities of its operations in its MD A.
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