Question

Pl elaborate your answer in at-least 150 words. Thanks Which of the following are not revenue-related fraud symptoms?

Lifestyle symptoms

Tips and complaints

Control symptoms

Analytical symptoms

All of the above are revenue-related fraud symptoms

Answer 1

Identifying fraud symptoms in financial statement requires observation and recognition.

Revenue related fraud symptoms are divided into 6 categories-

1.Analytical symptoms

2.Accounting or documentary symptoms

3.Lifestyle symptoms

4.Control symptoms

5.Behavioral and verbal symptoms

6.Tips and complaints

So all of the above are revenue related fraud symptoms, please find explanation below:

Lifestyle symptoms- Lifestyle symptoms includes major earning of company's stock around earning release, significant bonuses, executive's personal net worth tied up in company stock

Tips and complaints- It includes company's whistle blower system, revenue fraud disclosed at company with which significant business is done.

Control symptoms- It includes override of revenue cycle related significant internal control activities by management, weakness in key accounting process. New, unusual, large customer of company not passed through customs approval process also comes under fraud symptoms.

Analytical symptoms- It includes too low bad debt expense, too high revenue or sales, too low sales discount ,too low sales return, too hight account recievable, allowance for doubtful accounts appear too low, cash collected is low compared to reported revenue.

So all of the above represent revenue related fraud symptoms.