(Please help)

ABCDE Technolgies, INC., designs manufactures and markerts an extensive line of PC cards. The company sells its PC cards primarly to original equipment manufactures for industrial and commercial applications in a market with intense competition. In fact, many OEM companies ran into finacial difficulty in 2016 because of fierce competition. The following tables are part of the companys financial statements for 2015 and 2016.

1. Determine the red flags that exist in these financial statements. Describe the scenerios that might contain these systems.

2. Based upon the red flags and scenarios you identified, determine what types of financial statement fraud the company may be involved in. (HINT: pay careful attention to COGS, Sales, and allowance for doubtful accounts)

ABCDE TECHNOLOGIES, INC., CONSOLIDATED BALANCE SHEET (PARTIAL)-UNAUDITED DECEMBER DECEMBER 31, 2016 31, 2015 Assets: Current Assets: S970,446 Cash and cash S6,181,520 equivalents Available for 4,932,763 sales securities Accounts receiv- 12,592,231 3,932,170 able, net of allowance for doubtful accounts of $148,300 and $139,200 at December 31 2016 and 2015, respectively Inventories 18,229,317 8,609,492 Other current 18,229,317 8,609,492 assets Total current assets $22,121,600 S60,165,148