The following are misstatements that might be found in the client's year-end cash balance (assume that the

Question:

The following are misstatements that might be found in the client's year-end cash balance (assume that the date is June 30):
1. The outstanding checks on the June 30 bank reconciliation were underfooted by $2,000.
2. A loan from the bank on June 26 was credited directly to the client's bank account.
The loan was not entered as of June 30.
3. A check was omitted from the outstanding check list on the June 30 bank reconciliation. It cleared the bank July 7.
4. A check was omitted from the outstanding check list on the bank reconciliation. It cleared the bank September 6.
5. Cash receipts collected on from July 1 to July 5 were included as June 29 and 30 cash receipts.
6. A bank transfer recorded in the accounting records on July 1 was included as a deposit in transit on June 30.
7. A check that was dated June 26 and disbursed in June was not recorded in the cash disbursements journal, but it was included as an outstanding check on June 30.

Required
a. Assuming that each of these misstatements was intentional (fraud), state the most likely motivation of the person responsible.
b. What control can be instituted for each fraud to reduce the likelihood of occurrence?
c. List an audit procedure that can be used to discover each fraud.

Accounts Receivable
Accounts receivables are debts owed to your company, usually from sales on credit. Accounts receivable is business asset, the sum of the money owed to you by customers who haven’t paid.The standard procedure in business-to-business sales is that... Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...