How may an employee embezzle funds by issuing an unauthorized sales credit memo if the appropriate segregation of functions and authorization controls were not in place?
An employee who has access to incoming payments, either cash or check, as well as the authorization to issue credit memos may pocket the cash or check of a payment for goods received. This employee could then issue a credit memo to this person's account so that the customer does not show a balance due.
You might also like to view...
The creation of the European Union has benefited marketers wanting to enter Europe because they now have access to a homogeneous market consisting of 27 countries
Indicate whether the statement is true or false
What is a microsite? Provide an example of a firm that is likely to benefit from the use of a microsite
What will be an ideal response?
Although the guidance in U.S. GAAP and IFRS states a preference that companies present cash flows from operations using the indirect method, most companies present cash flows from operations as a reconciliation of net income to operating cash flow (the direct method)
Indicate whether the statement is true or false
Ruby Corporation grants stock options to Iris on February 1, 2017. The options do not have a readily ascertainable value. The option price is $100, and the FMV of the Ruby stock is also $100 on the grant date. The option allows Iris to purchase 200 shares of Ruby stock. Iris exercises the option on August 1, 2018, when the stock's FMV is $150. Iris sells the stock on December 5, 2019 for $400. Determine the amount and character (i.e., ordinary, LTCG or STCG) of income recognized by Iris and the deduction allowed Ruby Corporation in 2017, 2018 and 2019 under the following assumptions:a.The stock option is an incentive stock option.b.The stock option is a nonqualified stock option.
What will be an ideal response?