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As the engagement Senior, you are responsible for completing the audit of the revenue cycle for Best City, a specialty retailer of consumer electronics, home

As the engagement Senior, you are responsible for completing the audit of the revenue cycle for Best City, a specialty retailer of consumer electronics, home office products, entertainment software, appliances and related services.

Best City (BC) is headquartered in Richmond, VA with over 450 retail outlets across the Eastern and Midwestern United States. The Company operates retail stores and successful websites under the brand names Best City and BC (www.BestCity.com and www.BC.com). Total sales for the fiscal year ending 12/31/16 were $5.4 billion; $4.3 billion were generated by its retail stores, while $1.1 billion were generated by its e-commerce websites.

Unfortunately, as part of year-end cut-off testing, you notice a few potential red flags for fraud within some of the website sales transactions that you believe should be reported to the audit manager and partner.

REQUIRED: Please briefly discuss any red flags for fraud within the following documents (including the type of fraud scheme suggested by each red flag).

NOTE: Assume no sales tax is charged for online sales.

Best City, Inc.

8945 Main Street

Uniform Bill of Lading (Domestic)

Shipper No. 315AD

Date: 12/29/2016

Document No. 264889

Richmond, VA

FOB Destination

23126

TO: Peter Venable

Vehicle #7

Carrier Name

(2 day deliv.)

Old Dominion

264 Mason Street; Columbia, SC 29201

Quantity Shipped

2

Phillips 25 inch LCD Monitor

Weight 6.2 lbs

Rate

$1.53 per lb

Charge

$9.49

1

HP EliteBook 1040 Laptop

15.6 lbs

$1.53 per lb

$23.87

Total $33.36

Best City, Inc.

8945 Main Street

Uniform Bill of Lading (Domestic)

Shipper No. 389RB

Date: 12/29/2016

Document No. 264891

Richmond, VA

FOB Destination

23126

TO: Chris Perry

Vehicle #8

Carrier Name

(2 day deliv.)

Old Dominion

174 Salem Way; Fairfax, VA 22031

Quantity Shipped 1

HP OfficeJet Pro 8720 Printer

Weight 5.3 lbs

Rate

$1.52 per lb

Charge

$8.06

Total $8.06

Best City, Inc.

8945 Main Street

Uniform Bill of Lading (Domestic)

Shipper No. 392RB

Date: 12/30/2016

Document No. 264893

Richmond, VA

FOB Shipping Point

23126

TO: Sylvia Creel

Vehicle #9

Carrier Name

(2 day deliv.)

Old Dominion

7387 Tristram Drive; Pfafftown, NC 27040

Quantity Shipped 2

Dell Inspiron 17.3 inch Laptop

Weight 9 lbs

Rate

$1.51 per lb

Charge

$13.59

1

55 inch LG TV

34 lbs

$1.51 per lb

$51.34

Total $64.93

Best City, Inc.

8945 Main Street

Uniform Bill of Lading (Domestic)

Shipper No. 318AD

Date: 1/5/2017

Document No. 264921

Richmond, VA

FOB Destination

23126

TO: Scott Ziegler

Vehicle #6

Carrier Name

(2 day deliv.)

Old Dominion

381 Amazon Way; Athens, GA 41040

Quantity Shipped

1

MacBook Pro 15.4 inch

Weight 13 lbs

Rate

$1.55 per lb

Charge

$20.15

1

65 inch Sony TV

43 lbs

$1.55 per lb

$66.65

1

Garmin DriveSmart 61 LMT

1.4 lbs

$1.55 per lb

$2.17

1

HP OfficeJet Pro 8710

5.2 lbs

$1.55 per lb

$8.06

Total $97.03

Best City, Inc.

8945 Main Street

Charge Sales Invoice (Domestic)

Credit Terms n/30

Date: 12/31/2016

Document No. 318519

Richmond, VA

23126

Customer ID: VENAB0012

Bill of Lading

Name: Peter Venable

No. 264889

Quantity Shipped

2

Phillips 25 inch LCD Monitor

Unit Price 371.00

Discounts

0.00

Extension

$742.00

1

HP EliteBook 1040 Laptop

1,239.00

0.00

$1,239.00

Total $1,981.00

Best City, Inc.

8945 Main Street

Charge Sales Invoice (Domestic)

Credit Terms n/30

Date: 12/31/2016

Document No. 318522

Richmond, VA

23126

Customer ID: PERRY1433

Bill of Lading

Name: Chris Perry

No. 264891

Quantity Shipped

1

HP OfficeJet Pro 8720 Printer

Unit

Price

285.00

Discounts

0.00

Extension

$285.00

Total $285.00

Best City, Inc.

8945 Main Street

Charge Sales Invoice (Domestic)

Credit Terms n/60

Date: 12/31/2016

Document No. 318548

Richmond, VA

23126

Customer ID: CREEL7291

Bill of Lading

Name: Sylvia Creel

No. 264893

Quantity Shipped

2

Dell Inspiron 17.3 inch Laptop

Unit

Price 1,324.00

Unit

Discount

264.80

Extension

$2,118.40

1

55 inch LG TV

862.00

172.40

$689.60

Total $2,808.00

Best City, Inc.

8945 Main Street

Charge Sales Invoice (Domestic)

Credit Terms n/60

Date: 12/31/2016

Document No. 318525

Richmond, VA

23126

Customer ID: ZIEGL0005

Bill of Lading

Name: Scott Ziegler

Quantity Shipped

1

Macbook Pro 15.4 inch

Unit Price 1,460.00

Discounts

0.00

Extension

$1,460.00

1

65 inch Sony TV

1,980.00

0.00

$1,980.00

1

Garmin DriveStart 61 LMT

212.00

0.00

$212.00

1

HP OfficeJet Pro 8710

147.00

0.00

$147.00

Total $3,799.00

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