Give an example of how a CFO or Controller can fraudulently manipulate financialstatements through the use of journal entries. Separately, give an example of afinancial reporting practice that is subject to management estimates e.g. fair valuemeasurements of assets, goodwill, transfer pricing - and discuss internal controls thatcan reduce the opportunities for unethical behavior.

Financial statements may be manipulated by the employees of the organization to exploit…

Answered: internal controls

Business

Accounting

internal controls

Auditing: A Risk Based-Approach (MindTap Course List)

11th Edition

ISBN:9781337619455

Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Publisher:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Chapter3: Internal Control Over Financial Reporting: Responsibilities Of Management And The External Auditor

Section: Chapter Questions

Problem 2CYBK

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Question

Give an example of how a CFO or Controller can fraudulently manipulate financial
statements through the use of journal entries. Separately, give an example of a
financial reporting practice that is subject to management estimates e.g. fair value
measurements of assets, goodwill, transfer pricing - and discuss internal controls that
can reduce the opportunities for unethical behavior.

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