The purpose of this paper is to identify potential financial statement fraud schemes at Apollo Shoes and describe the type of evidence to look for to determine whether fraud is occurring, and to finally outline how the substantive procedures previously identified will be used to analyze potential schemes. Potential financial statement fraud schemes After reviewing the audit inquiry response from Lawyers “R” Us, LLC, it has been determined that the current litigant Apollo Shoes is involved in could result in as much of a loss as $10,000,000, with legal fees considered. This amount was not accrued for as a liability. After reviewing the board meeting minutes, two related-party transactions were discovered. Josephine Mandeville is an outside board member and audit committee member.
To begin her analysis, Mayo estimated what values the assets would have is Mark X were liquidated. Working with the bank’s appraisers and liquidation experts, she concluded that the land and buildings could be sold for $5 million, while the equipment would bring in another $3 million. The receivables could be sold for $0.75 on the dollar, but the inventory would bring only $0.50 on the dollar. Next, Mayo had to make sure that she understood the nature of the claims against Mark X. The accruals currently (that is, at the end of 1992) consist of $5 million of accrued taxes and $2,331,000 of accrued wages.
A tax advantage of business combination can occur when the existing owner of a company sells out and receives: a. cash to defer the taxable gain as a “tax-free reorganization” b. stock to defer the taxable gain as a “tax-free reorganization” c. cash to create a taxable gain d. stock to create a taxable gain 2. Publics Company acquired the net assets of Citizen Company during 20X9. The purchase price was $800,000. On the date of the transaction, Citizen had no long-term investments in marketable equity securities and $400,000 in liabilities. The fair value of Citizen assets on the acquisition date was as follows: |Current assets |$ 800,000 | |Noncurrent assets | 600,000 | | |$1,400,000 | How should Publics account for the $200,000 difference between the fair value of the net assets acquired, $1,000,000, and the cost, $800,000?
Petitioner was also given an opportunity to identify and substantiate any payments of the penalty assessments and was offered a face-to-face hearing. Petitioner submitted to the IRS a Form 843, which is a Claim for Refund and Request for Abatement; however, petitioner failed to submit the required bond with that form. Therefore, respondent did not process the claim. On November 12, 2008, petitioner requested a postponement of the CDP hearing because he was working on an installment agreement with a revenue officer. The settlement
3. The Reform Act eliminates securities fraud as a reason for racketeering. This provides treble damages for the auditor. 4. The Reform Act limits third party rights to sue to only five times.
Social Security | A Great “Idea” | | Chris Barron | 12/7/2010 | Professor John MundyEmbry-Riddle Aeronautical University | | | Abstract Should Social security be changed to allow personal retirement accounts? Two arguments have gained traction over the past five years. Argument one being a proposal to allow a portion of all individual’s accounts to be managed by the person as they saw fit, thus eliminating major administrative costs as well as significant benefit liabilities the SS system simply does not have. Argument two is that allowing individuals to manage their own retirement accounts would not fix the system. Rather it undermines the safety net that has provided security to tens of millions for over eight decades.
The costs of the accounting issues cost HP approximately $5 billion dollars. The Alleged Fraud According to Hewlett-Packard, before the acquisition, Autonomy was selling hardware at a loss. Selling some hardware products had a very low margin to take a loss. Then the software company went around and booked these sales as high-margin software sales. Instead of booking them as a cost of goods sold, they were booked as a marketing expense.
ALZA received $275.1 million throughout the 5 years by creating TDC as their R&D company. Other than that, even ALZA had paid $250 million for TDC as capital but all the expenses are deducted from this amount, and yet ALZA able to receive TDC’s Class A Common Stock for zero investment and received $275.1 million during this period. It increases the earnings of ALZA and the additional investment for ALZA company. Besides, ALZA did not include assets, liabilities, equity, revenue or expenses accounts of TDC, but it includes the revenues received by TDC, thus the additional revenue increases the income of ALZA and leads to a better financial position. Crescendo’s arrangement also increases the profit of ALZA as it also received $283.5 million from Crescendo just like TDC’s arrangement.
In issue was a payment of $10M by an HIH subsidiary to a company of which Rodney Adler was a sole director. By use of a trust mechanism, approximately $4 million was used to acquire HIH shares, venture capital unlisted investments were purchased from another Adler company, and loans were made to entities, which were associated with Adler. These transactions occurred with no board or member approval and without disclosure – the loans were given without proper documentation or security being sought and the payment was made so that it would not come to the attention of other HIH directors. Adler, Williams and fodera was found to have contravened four sections of the Corporations Act relating to a director's duty to act in good faith and for a proper purpose (section 181), duty not to improperly use position (section 182), duty not to improperly use information (section 183), and the duty to act with due care and diligence (section 180). Act in good faith and for a proper purpose (section 181) A director or other officer of a corporation must exercise their powers and discharge their duties: 1 in good faith in the best interests of the corporation 2 for a proper purpose.
Romney doesn’t have a five-point plan; he has a one-point plan. And that plan is to make sure that folks at the top play by a different set of rules.” Utilizing this device adds inferences on the fact that Romney only had a one point plan. This claim states that Romney only supports the wealthy. A close relation is Epistrophe. Romney used it for one of his claims that night, “When we’re talking about math that doesn’t add up, how about $5 trillion of deficits over the last four years.