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Forensic Accounting: Cash Disbursements

Cash Disbursements. Please respond to the following:

-Estimate the effects of falsifying records, diverting cash to ghost employees, and duplicating expenses on a small, midsize, and large business.
-Choose a small, midsize, or large business and put safeguards into place.

Solution Preview

When records are falsified and cash is diverted to ghost employees, it increases the company's expenses. Even if the amount is small based upon the revenue and total expenses of the company, it still takes away from the company's working capital. All misstatements also affect investors because the less cash, the less in dividends the company has to pay out (due to increased expenses). Ghost employees also create an additional payroll tax expense, which further decreases cash. When expenses are duplicated, it has the same effect on cash ...

Solution Summary

This solution estimates the effects of falsifying records, diverting cash to ghost employees, and duplicating expenses. This solution also discusses a specific business and the safeguards that should be in place. Includes 3 references.

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