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MCS,PHD
Argosy University/ Phoniex University/
Nov-2005 - Oct-2011
Professor
Phoniex University
Oct-2001 - Nov-2016
Case 1. Clever, Inc., is a car manufacturer. Its 2005 income statement is as follows: Clever, Inc.
Income Statement For the year ended Dec. 31, 2005
Sales revenue $20,000
Less cost of goods sold $10,000
Gross margin $10,000
Expenses $8,000
Net income $ 2,000
Alexander, Inc., is a car rental agency based in Florida. Its 2005 income statement is as follows: Alexander, Inc.
Income Statement For the year ended December 31, 2005
Sales revenue $20,000
Expenses $15,000
Net income $ 5,000
During 2005, both Clever, Inc., and Alexander, Inc., incurred a $1,000 fraud loss. How much additional revenue must each company generate to recover the losses from the fraud? Why are these amounts different? Which company will probably have to generate less revenue to recover the losses?
What clues made Jane believe that fraud was involved?
Why is it important that fraud examiners follow up on even the smallest inconsistencies?
While trying to identify possible suspects, fraud examiners researched personal files of all the employees. What sort of things might the fraud examiners have been looking for to help them identify possible suspects?
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