Question One (20 points) Arena Corporation is a high technology company that produces miniature computer processing chips. The company is one of the most successful in its industry because it is always developing faster and more efficient processors in order to maintain a competitive advantage. Sales and earnings increased significantly in recent quarters causing the companys stock price to rise. Lowell Reed was recently appointed to be the new internal auditing manager. He was promoted because he has an excellent understanding of the companys business and its industry. At the close of the third quarter, Joe Nebraska, CEO of the company asked Lowell and other senior managers of the company to discuss year end earnings projections. During the meeting, it became apparent to Lowell that the team was anxious because the company lost several key contracts with a major customers to an overseas competitor. Lowell noticed more closed door meetings than usual and people were more stressed than ever. Moreover, the long time corporate controller, Beth McElroy, CPA, was transferred to London as an IT manager. She was replaced by Jerry Rogers who spent most of his career in HR. An announcement to all employees indicated Beths and Jerrys transfers were designed to broaden their overall career developments. In November, more bad news came out as a Chinese competitor announced a significant improvement in the chip industry, one that might revolutionize the industry. Arenas stock tumbled as the market perceived the companys future prospects less favorably. At the end of the fourth quarter, the company announced earnings and beat all the estimates set by outside analysts. In fact, it reported its highest earnings to date! Lowell had a feeling all was not right somehow and began to reflect on all he had observed over the last couple of months. Questions: List and briefly describe the six different types of fraud symptoms. Describe the fraud symptoms that might be present at Arena Corporation. Assume Lowell has access to the companys year end financial statements. What types of analyses can he perform on the statements to see if the books were cooked