ACC 556 WEEK 2 Crooked Scenario 2

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ACC 556 WEEK 2 Crooked Scenario 2

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ACC 556 WEEK 2 Crooked Scenario 2

ACC 556 WEEK 2 Crooked Scenario 2

 

LEARNING TEAM ASSIGNMENT

Read the scenarios and follow the subsequent directions.

Click the Assignment Files tab to submit your assignment as a Microsoft® Word document.

Scenario 1  

A Girl Scout comes to the door selling cookies. I ordered three boxes of Thin Mints and paid her. But when she got home she tallied all the boxes she sold and realized that she needed 10 more boxes to win those free tickets to Six Flags Great Adventure.  So what does she do?  She doubles my Thin Mints order, along with a few other customers’, unbeknownst to all of us. She just knows this won’t be an issue since everyone loves Thin Mints.

Scenario 2   

 

In the latest scandal involving a prominent American corporation Xerox revealed last week (2002) that over the past five years it has improperly classified over $6 billion in revenue, leading to an overstatement of earnings by nearly $2 billion. The effect of the manipulation was that Xerox could count as earnings what were essentially future revenues. This boosted short-term profits and allowed the company to meet profit expectations.

 

 

Scenario 3    

 

A prominent construction company building a sanitation plant for the city, bought equipment for the facility for a total of $2 million. However, they delayed delivery until the completion of the plant. The seller recorded the revenue even though nothing had been exchanged physically from their inventory for over a year.

 

 

Scenario 4   

 

Mr. Kimble, CEO of a prominent financial services company, needed a short-term loan to make his vacation beach-home mortgage payment.  He had his secretary approach Mrs. Wentworth, the CFO of the company and his sister-in-law, to write a check for $35,000.  Mrs. Wentworth slipped him the check and said he should pay it back quickly before the next audit.  Since they had done this many times before there was no risk to the company.

 

 

Scenario 5   

Sally opened a checking account at Bank A and Bank B. Initially, she deposited $500 in Bank A and $0 in Bank B. She then wrote a $10,000 check on her account at Bank A and deposited it in Bank B. She knew that the small town bank took several days to clear checks.  In that time, Sally wrote a $10,000 check on her account at Bank B and deposited it in Bank A to cover her first $10,000 check. Sally continued writing bad checks between her accounts. By doing so, she illegally obtained a $10,000 interest-free loan.

 

Scenario 6   

Kevin wants to get a $1 million dollar loan from the bank to expand his business. However, he needs to dress up his balance sheet especially the assets section so it looks good for the bank auditor.  Mary suggests to Kevin that he keep three trucks loaded with inventory perpetually moving from warehouse to warehouse dropping off inventory and picking it up right after inventory counts are made.  Keven has a central warehouse and 3 smaller warehouses distributed around the city.   Each warehouse counts inventory on a different day of the week.

 

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ACC 556 WEEK 2 Crooked Scenario 2

ACC 556 WEEK 2 Crooked Scenario 2