Susceptibility to Fraud and Effects of Misstatements
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Consider how an organization must manage cash, receivables, and inventory. Which of the three variables is the most important to manage (not internal control)? Is one more susceptible to fraud and errors than the others? Explain your answer. How would a misstatement in each affect the organization?
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Solution Summary
For this response, 243 words are given to instruct an organisation in dealing with cash, receivables and inventory as well as which of these are most vulnerable and how misstatements would affect the balances.
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The most important to manage would be cash, because it usually the company's most freely available asset. The second most important to manage would be inventory, because it is usually one of the most liquid assets (can easily be converted to cash). I don't know that one is more prone to fraud and errors, but if I had to rank them in order of ...
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