Why does the following situation occur and what controls can we design in a new computer system to prevent and detect this situations?
Typical financial statement fraud techniques involved the overstatement of revenues and assets. Over half the frauds involved overstating revenues by recording revenues prematurely or fictitiously. Many of those revenue frauds only affected transactions recorded right at period end (i.e., quarter end or year end). About half the frauds also involved overstating assets by understating allowances for receivables, overstating the value of inventory, property, plant and equipment, tangible assets, and recording assets that did not exist.© BrainMass Inc. brainmass.com June 3, 2020, 8:26 pm ad1c9bdddf
I have prepared some information that will help you understand why these situations may occur. The "new computer system" should be designed ...
The solution explains why financial fraud exists and recommends a computer system that can be used for prevention.