While Evaluating Apollo Shoes
While evaluating Apollo Shoes, there are some areas of concern that are potential fraudschemes. The fraud can lead to the entire collapse/demise of the company if not corrected.These will also affect the share value and investor confidence. An overview of the process of investigation along with recommendations for the company.As with any company, revenue recognition is an important part of operations of a ApolloShoes. As stated in GAAP standards, revenue generated must be realistic and recognizable.Revenue is recognized when the sale is complete. The sale is approved or paid for and theproduct is handed to the customer or mailed to the desired location. When reviewing the booksfor Apollo Shoes, the numbers are inconsistent with the accounts receivable. Confirmationreceived from customers were in line with the account balances. This raised a flag of concernfor revenues being misstated. The difference doesn 't appear to make a considerable increase incash flow, but the issue needs to be addressed and corrected before the difference is larger. Thiscan also be an indication of revenue misstatements.When there are discrepancies in the financial statements obtained from the company andthe financial institution, further investigation must be performed.Fixed AssetsThere are some common forms of fraud in relation to fixed assets, concealment, misuse,and improper classification. All of these have an impact on the book value for the organizationand the equity for the shareholders. The organization is responsible to record assets in thecorrect account for tracking a valuation.The fixed assets can also be traced from the beginning of the year to the end forverification of existence and/or write off of assets. The capitalization policy of assets can also beevaluated for accuracy and possible changes that need to be made. The damaged the Apollo Financial Statement Fraud Schemes 3Shoes building sustained from the hurricane were funded and capitalized. The same chargescould
References: ouwers, T. J., & Reynolds, J. K. (2007). APOLLO SHOES, INC. An Audit Case to Accompany. Louwers, T., Ramsay, R., Sinason, D., & Strawser, J. (2007). Auditing & assurance services: Alook beneath the surface (2nd ed.). New York: McGraw-Hill/Irwin.Wells, J. (2005). Principles of fraud examination. Hoboken, NJ: Wiley. Activity (2)