Define misappropriation of assets and give two examples of misappropriation of assets.

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Part 1

A.

Misappropriation of assets is fraud that involves theft of an entity's assets. Two examples include (1) the intentional omission of accounts payable and/or other liabilities, and (2) the expensing of fixed assets that should have otherwise been capitalized in order to reduce income tax expense.

B.

Misappropriation of assets is fraud that involves theft of an entity's assets. Two examples include (1) an accounts payable clerk issuing payments to a fictitious company controlled by the clerk, and (2) a sales clerk failing to record a sale and pocketing the cash receipts.

C.

Misappropriation of assets is an intentional misstatement or omission of amounts or disclosures with the intent to deceive financial statement users. Two examples include (1) incentives/pressure, and (2) opportunities.

D.

Misappropriation of assets is an intentional misstatement or omission of amounts or disclosures with the intent to deceive financial statement users. Two examples include (1) accelerating the timing of recording sales revenue to increased reported sales and earnings, and (2) recording expenses as fixed assets to increase earnings.