We learned in class by watching the 6 video clips regarding the big Scandal with HealthSouth that one the two major activities in their fraud was falsely capitalizing regular expenses In a nutshell HealthSouth is A Public company who is providing outpatient rehabilitation services, They noticed that the business is not that great as they proclaimed, business is not so profitable and it also have too much expenses which this will end up taking away from the profit and they will show lower earnings that expected so they came up with a fraudulent idea to create false entries in their books by claiming that the expenses they have is not real expenses, they called it investing like everyone understands when a business is buying a building its not called a expenses which will show the business less profitable ,it is the opposite the business is growing, the same think they did with entering regular expenses like payroll or utility expenses But in order the books should look a little acceptable and no one should come up on their fraud instantly and specially the lower level bookkeeping team by doing their day to day entries and knowing that utility expenses is not a capital improvement they had to do it in a professional way Let’s go in to details of entering an expenses and closing it off by year end so we can understand how they did it to avoid being suspicious for their bookkeepers and it should be polished nicely REGULAR EXPENSES ENTRY As we learned in class by keeping accounting on the simple way of a General ledger the entries goes as follows, every entry is A Debit for 1 account following with a credit on the other for Example when you have a Rent Expenses of $ 15,000 meaning you taking out money from cash account to p... ... middle of paper ... ...ncreasing the capital So ( Falsely ) the books looked very good the business is ending up making money and again the trial balance and the account equation are correct EASY WAYS TO DETECT • Audit the assed account which was increased by year end from the expenses account trough the income summery account, this is a easy way because you don’t need to go over each individual expenses account what was entered during the year , you will need to check only this particular entry with his details • Making an appraisal report by every year end and the total Appraised value needs to match the total number of the assed account , and if it does not match you know that some false transactions were entered ,but remember you will need to calculate on the appraisal report the depreciation expenses towards the market value increase or decrease for the last year assed totals .
The analytical procedures is yet another way to detect the fraud. Through analytical procedures the relationship between different figures is develop that support the increase or decrease effect on the balance sheet and the income statement. The following procedures to be performed:
Management accounting in organisation is very important for decision-making and to make the business more efficient and therefore increasing its profits. Is the process of preparing accounts that can help managers to make day-to-day and short-term decisions, by providing them with accurate and timely key financial and statistical information...
How the Merchants of Venice Created Modern Finance, Jane Gleeson-White explores the development of double-entry accounting from its ancient roots up to its impacts on modern day society. She shows that the effects of double-entry accounting are widespread and encompass almost every aspect of life, not just those involving accounting and finance. Gleeson-White delves into topics ranging from the economic system of capitalism to environmental degradation. She even includes a brief psychology discussion comparing corporations to psychopaths. By covering all of these topics, Gleeson-White emphasizes the importance of double-entry accounting and the role that Venetian merchants played in the perfection and widespread use of this accounting system.
Madura, Jeff. What Every Investor Needs to Know About Accounting Fraud. New York: McGraw-Hill, 2004. 1-156
The term “fraud” is commonly used to describe the use of deception to deprive, disadvantage or cause loss to another person or party. This can include theft, the misuse of funds or other resources, or more complicated crimes such as false accounting and the supply of false information. This case study of Mountain State Sporting Goods is an excellent example of individuals acting on the opportunity to financial benefit by committing what they thought was harmless adjustments, but in reality was fraud. In this case study there are is just so much wrong with this company and how it operates. We noticed multiple areas of concern before even seeing the financial statements and my concerns were confirmed upon further investigation.
When discussing health care fraud we need to know what exactly we are discussing. There are many different types of health care fraud. This paper will give an overview of the five major types of health care fraud. The different types occur on both the patient/consumer level and at the provider level. According to the Centers for Medicare & Medicaid Services (CMS) the five major types of health
Collectively, the Department of Health and Human Services and the Department of Justice work to reduce healthcare fraud and investigate dishonest providers and suppliers. The Health Care Fraud Prevention and Enforcement Action Team recouped almost 3 billion in fraud, this year alone. Also, aggressive strategies exist to eliminate Medicare prescription fraud. Patients abusing or selling painkillers received by visiting several doctors and obtaining multiple prescriptions costs Medicare millions annually. Fraud affects everyone, preventing it requires government officials and citizens diligently working together.
In my essay I am going to elaborate about the types of frauds, and my thesis statement here lies as “Types of frauds and committed by whom in health care system? Who can be suspected for this act and what can we do for future to remove these fraudulent?”
Hanson, J. R. (n.d.). Fraud or confusion? RDH Magazine, 19(4). Retrieved 3 15, 2014, from http://www.rdhmag.com/articles/print/volume-19/issue-4/feature/fraud-or-confusion.html
Pande, V., & Maas, W. (2013). Physician Medicare fraud: Characteristics and consquences. International Journal of Pharmaceutical and Healthcare Marketing, 7(1), 8-33.
The definition of Health Care fraud is knowing and willful executing, or attempt to execute, a scheme or deceit to defraud a health care insurance or benefit program, or to obtain by fraudulent means any benefit or payment from the program. Health care fraud and abuse is purposely misrepresenting identity, symptoms, or other facts, for the intention of receiving more money or greater benefits from the insurance company. Healthcare providers can also commit fraud as well by billing insurance companies for services not performed, or by billing for a more complex service than was actually performed. There has been a rise in Healthcare fraud and abuse, causing companies billions of dollars.
Accounting has been a living part of history since the Neolithic period and remains a prevalent and ever-evolving profession still to this day. This essay therefore proposes to look at the significance and role of history specifically related to the accountancy field. In order to substantiate this claim of the importance of accounting history, numerous benefits of accounting history will be presented. Factors such as the use of historical research and its availability thereof to constantly develop accounting policies will be discussed as well as how historical accounting practices can be used to understand current practice and assist in the training of individuals in the accounting field. Lastly, the importance of history in the development
The accounting cycle is a series of steps starting with recording business transactions and leading up to the preparation of financial statements. This financial process demonstrates the purpose of financial accounting–to create useful financial information in the form of general-purpose financial statements. In other words, the sole purpose of recording transactions and keeping track of expenses and revenues is turn this data into meaning financial information by presenting it in the form of a balance sheet, income statement, statement of owner’s equity, and statement of cash flows.
Alteration: paper evidence difficult to alter without detection. Any one tries to change anything on paper there must be marks, auditor can find the marks and whether there are changes in financial statements. Any change for fraudulent, misappropriation of asset can been found easily if auditor wants to find.
The external auditor may be not discover the whole fraud information, but if they have the responsibility, they will found the company’s fraud is not difficult. The public think the auditor has responsibility to detect the financial statements’ fraud and to do the report to disclose the fraud, the auditor has responsibility to do this , but the auditor also has the other responsibility, not only detect and report the material fraud. The auditor responsibility to detect the material fraud just one part of the auditor responsibility. The auditor professional guidance has four parts. The auditor’s responsibility for the detection of fraud, the auditor’s responsibility for reporting fraud to management, the auditor’s responsibility for reporting fraud to shareholders and the auditor’s responsibility for reporting fraud to third parties. First, The auditor's responsibility for the detection of fraud is limited planning, performing and evaluating the work to enable employees to have a reasonable expectation to detect whether there are some false materials in the financial statements. It could impair the truth and fairness of the view given by the financial statements, whether these misstatements were caused by fraud, other irregularities or errors. The Guangxia event just because the auditor not evaluate the financial statements as well, not act the economic-police as well. They just consider their own interest, not effective to implement the evidence-based, certification and verification procedures. Second, The auditor’s responsibility for reporting fraud to management, the auditor should report to the firm’s management of the employee frauds. If the firm give the auditor a true and fair financial statement point, despite the statement has some fraud or other irregularity points, the auditor will have no specific responsibility to report fraud or other irregularities in