Q2. Investigating Financial Statement fraud Boon Jonson (BJ) is a medium-sized construction company operating out of the south-eastern suburbs of Melbourne. BJ operates out of a single building of about 500,000 square feet and has recently secured a government contract to build and maintain local council infrastructure. BJ accounts for these, and other similar projects, using the percentage completion method. They have other work they bill using the completed contracts method. A recent tip-off to the council suggests that Boon Jonson may be engaging in fraudulent financial reporting, so the council have engaged your expert forensic accounting services to investigate on their behalf. The following financial information is provided: 2018 2019 2020 Current Assets Cash 1,440,000 319,200 180,000 720,000 1,480,800 354,000 180,000 732,000 1,560,000 426,000 180,000 726,000 Accounts Receivable Prepaid Expenses Inventory Non-Current Assets Motor Vehicles (net) Equipment (net) Buildings 360,000 1,080,000 1,800,000 285,000 1,086,000 1,800,000 285,000 1,140,000 1,800,000 Current Liabilities Accounts Payable Accrued Expenses Unearned Revenue Non-Current Liabilities Loan 660,000 118,800 72,000 666,000 121,200 66,000 576,000 102,000 36,000 420,000 384,000 480,000 Sales: 'Percentage of completion' method 'Completed contracts' method Construction Costs Other Costs (selling, admin etc.) 1,500,000 2,640,000 660,000 2,400,000 1,470,000 2,700,000 672,000 2,448,000 1,740,000 2,820,000 564,000 2,520,000 Required: a. Perform horizontal analysis on the data in the table above, and identify five accounts that you consider to be particularly questionable. Show all workings (you may work in Excel, and copy the results into your solution document). b. For each of the five accounts you identified in part 'a', explain with discussion what five different fraud schemes could be happening that would explain the result