REMEMBER: In addition to the"how-to" instructionsfound in the first chapter, there areYouTube instructionsthat I prepared (in Modules under YouTube Instruction) giving a step-by-step overview.

1.ReadPAGES 1-28inFraud Examination Casebook with Document: A Hand-on Approach.

2. Download the Excel template:Financial Statement Fraud - Exercise #2 Template.xlsx

3. Follow the specificINSTRUCTIONS ONPAGE 21.

4.Use theDOCUMENTS ON PAGES 115 - 154 (primarily 138-154).

Note that the assignment is due atmidnight on Sunday.

DO NOT WAIT UNTIL LAST MINUTE! IT COULD TAKE YOU AS MUCH AS 8 HOURS.

Fraudulent Financial Statements (Larsen Convenience Store), Exercise #2 (entering and analyzing SBA personal financial statements). Use/submit the Excel templates in Excel or Open Office. There is room for both calculations and narratives. Be sure to put your name on the working paper. Then, submit your answers by unloading your spreadsheet below.Check the grading rubric to make sure that you cover each of the required answers.

Be sure toRE-READtheOverview of Serial Cases- the first two cases are related. The owner of Larsen Convenience Store (Greg Larsen, the subject of the first case) is married to Tonya Larsen (the subject of the next case). The fraudulent financial statement case is related to arson-for-profit.DO NOT DISCUSSthe arson-for-profit. Instead, work only the three fraudulent financial statements (alleged fraudulent IRS Schedules C, fraudulent SBA personal financial statements given to a financial institution, and fraudulent proof-of-loss submitted to an insurance company). The motive in an arson-for-profit case is getting more insurance proceeds, extinguishing debt, and / or similar reasons. HINT:you will find out that increasing the insurance proceeds by fraudulently increasing the ending inventory also increases gross and net profits and can make an unprofitable business look like its profitable. NOTE:Submission ofmaterialmisstatements to the IRS (or any federal agency), financial institution, and / or insurance company may violate federal bank fraud, tax fraud, wire fraud, mail fraud, bankruptcy and a host of other criminal statutes. Look for thecertification (accuracy) statements that the person submitting the document signs, which are found near the signature line. The signer(s)isattesting to the accuracy of what is submitted under the penalties of perjury and/or other federal criminal criminal penalties associated withmaterialmisstatements.

NOTE NOTE NOTE:When writing the reportDO NOT DISCUSS A PERSON'S GUILT OR INNOCENCE. Guilt or innocence is a decision for the judge and jury. You give statements of fact and/or expert opinions on such things as material misstatements, material omissions, solvency, increases in debt, decreases in cash, etc. The triers of fact (judge and jury) will determine guilt or innocence.

To provide you with core knowledge, which is needed to work this type of case,READHow to Perform a Horizontal and Vertical Analysison pages 13-19beforestarting the case.

Excercise #1 concerned the IRS Income Tax Returns submitted to the Internal Revenue Service. Exercise #2 involves entering and analyzing data from the Small Business Administration (SBA) personal financial statements, which were submitted to a federally insured financial institution AND determining the impact of the material misstatements / material omissions by estimating the real ending inventory and entering the real accounts payable from vendor documents and the liability associated with the wrongful death suit.

As this is your first exposure to a fraud examination, if you have any questions please post them in Ask Prof! on the discussion board so that I can answer those questions for all students. If need be, call me on my cellphone (770-846-8275) before 9 pm.

If you have any questions please post them in Ask Prof! on the discussion board.

Rubric

Financial Statement Fraud - Exercise #2

Financial Statement Fraud - Exercise #2

CriteriaRatingsPts

This criterion is linked to a Learning OutcomeCorrectly scheduled 2014-2016 SBA personal financial statements

40.0pts

This criterion is linked to a Learning OutcomeCorrectly separated the assets & liabilities into business and personal

25.0pts

This criterion is linked to a Learning OutcomePerformed horizontal analysis of dollars and percentages and identified material irregularities

15.0pts

This criterion is linked to a Learning OutcomeExplained whether Greg Larsen committed some form of financial statement fraud

5.0pts

This criterion is linked to a Learning OutcomeDescribed what accuracy certifications (paragraphs near the signature line) on the tax return and bank financial statement address providing materially inaccurate information

5.0pts

This criterion is linked to a Learning OutcomeExplained how Larsen Convenience was insolvent or solvent on January 7, 2016

5.0pts

This criterion is linked to a Learning OutcomeExplained how Greg Larsen's business insolvency/solvency impacted his wife Tonya Larsen

5.0pts

Total Points:100.0