Question;Wk 4 DQ;Problems;DQ 1 Internal Control;and Cash;From Chapter 7, Fraud Case 7-1. Complete all parts of the case and respond to;at least two of your classmates? postings.;Levon Helm was a kind of one-man;mortgage broker. He would drive around Tennessee looking for homes that had;second mortgages, and if the criteria were favorable, he would offer to buy the;second mortgage for ?cash on the barrelhead.? Helm bought low and sold high;making sizable profits. Being a small operation, he employed one person, Cindy;Patterson, who did all his bookkeeping. Patterson was an old family friend, and;he trusted her so implicitly that he never checked up on the ledgers or the;bank reconciliations. At some point, Patterson started ?borrowing? from the;business and concealing her transactions by booking phony expenses. She;intended to pay it back someday, but she got used to the extra cash and;couldn?t stop. By the time the scam was discovered, she had drained the company;of funds that it owed to many of its investors. The company went bankrupt;Patterson did some jail time, and Helm lost everything.;Requirements;What;was the key control weakness in this case?Many;small businesses cannot afford to hire enough people for adequate separation of;duties. What can they do to compensate for this?;DQ 2 Receivables;Discuss the allowance method and the direct write-off method of accounting for;bad debts. When is the expense for uncollected accounts receivable recognized;under each method?
Paper#41900 | Written in 18-Jul-2015Price : $22