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Financial Statement Fraud Schemes on Apollo Shoes

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Financial Statement Fraud Schemes on Apollo Shoes
Week Five Ardyth Smith
ACC 556
December 12, 2011
Professor Jennifer S. Brown

While evaluating Apollo Shoes, there are some areas of concern that are potential fraud schemes. 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 Apollo Shoes. 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 the product is handed to the customer or mailed to the desired location. When reviewing the books for Apollo Shoes, the numbers are inconsistent with the accounts receivable. Confirmation received from customers were in line with the account balances. This raised a flag of concern for revenues being misstated. The difference doesn't appear to make a considerable increase in cash flow, but the issue needs to be addressed and corrected before the difference is larger. This can also be an indication of revenue misstatements. When there are discrepancies in the financial statements obtained from the company and the financial institution, further investigation must be performed.
Fixed Assets
There 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 organization and the equity for the shareholders. The organization is responsible to record assets in the correct account for tracking a valuation. The fixed assets can also be traced from the beginning of the year to the end for verification of existence and/or write off of...

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