Red Flags. Assume that Aardvark and Zebra compete in the same four-digit SIC code industry and offer comparable products and services.
The following table contains their reported financial performance and condition for the last two years, calculated ratios and key nonfinancial
metrics. Assume that industry ratios were derived from a reputable source. Further, assume that nonfinancial metrics were derived from reliable public and internal sources.
the Aardvark and Zebra data provided to complete the following assignments:
Describe any symptoms of fraud
Draw a conclusion about fraud predication and recommend next steps.
b. How would an audit not catch missing casn amounts of the prevalent than frand in countries outside the United States? Why? In the case of Satyam, the company reported almost SI billion in cash magnitude? balances, yet close to $900 million was missing. Two quections: RIEF CASES Red Flags. Assume that Aardvark and Zebra compete in the same four-__ metrics. Assume that industry ratios were derived from a reputikle digit SIC code industry and offer comparable products and services. source. Further, assume that nonfinancial metrics were derived fine The following table contains their reported financial performance and condition for the last two years, calculated ratios and key nonfinancial the the Aurdark and Zebra data provided to complete the following of experience, and is respoasible for collections abd financial reporting of avigments: revenues and ARR. During past threc audits, based on clevated risk concerns, 2. Deseribe any symptoms of fraud the auditor has completed extra uncompensated work. Preliminary engage- h. Drew a conclusion about fraud predication and recommend ment brainuorming identified concerns regarding: out sep. - Potential fictitious credit applications with fabricated information. - Sales to nonexistent cusiomen based on vertieal, honzontal, ratio, cach source. Further, assume that nonfinancial metrics were deaind fost reliable public and internal sources. condition for the last two years, ealepolted financial performance and Identification of Red Flags b. How would an audit not catch missing casn amounts of the prevalent than frand in countries outside the United States? Why? In the case of Satyam, the company reported almost SI billion in cash magnitude? balances, yet close to $900 million was missing. Two quections: RIEF CASES Red Flags. Assume that Aardvark and Zebra compete in the same four-__ metrics. Assume that industry ratios were derived from a reputikle digit SIC code industry and offer comparable products and services. source. Further, assume that nonfinancial metrics were derived fine The following table contains their reported financial performance and condition for the last two years, calculated ratios and key nonfinancial the the Aurdark and Zebra data provided to complete the following of experience, and is respoasible for collections abd financial reporting of avigments: revenues and ARR. During past threc audits, based on clevated risk concerns, 2. Deseribe any symptoms of fraud the auditor has completed extra uncompensated work. Preliminary engage- h. Drew a conclusion about fraud predication and recommend ment brainuorming identified concerns regarding: out sep. - Potential fictitious credit applications with fabricated information. - Sales to nonexistent cusiomen based on vertieal, honzontal, ratio, cach source. Further, assume that nonfinancial metrics were deaind fost reliable public and internal sources. condition for the last two years, ealepolted financial performance and Identification of Red Flags
