The year end for all HCHG entities is June 30

The audit partner for the audit of HCHG, Tania Fellowes, has discovered that two months before the end of the financial year , one of the senior nursing officers at Gardens Nursing Home was dismissed. Her employment was terminated after it was discovered that she had worked in collusion with a number of patients to reduce their fees. The nurse would then take secret payments from the patients.

The nursing officer had access to the patient database. While she was only supposed to update room-locationchanges for patients, she was able to reduce the patients' period of stay and the value of the other services provided. The fraud was detected by a fellow employee who overheard the nursing discussing the scam with a patient. The employee reported the matter to Gardens Nursing Home's general manager.

Which accounts on the balance sheet and income statement are potentially affected by the fraud? (several choices may be correct)

1 - Revenue overstated

2 - Revenue understated

3 - Accounts receivable may be understated

4 - Accounts receivable may be overstated

5 - Cost of Goods Sold is understated

6 - Room expenses may be understated