Vouch or Trace担保或痕迹.doc

“VOUCH OR TRACE” AUDITING PROJECT: REVENUE RECOGNITION STUDENT PROJECT You are a new accounting graduate. It is your first week on the job at the Los Angeles office of a CPA firm. Late yesterday, your manager, Cee Peea, set up an appointment for you to meet with her at 7.30 a.m. today about your next audit task at College Business Computers. You are still in adapting to your relocation to Los Angeles and your new job in this fast-paced and exciting environment. Here you are, plucked from little San Luis Obispo, adapting to the big-city lifestyle. You earn more than you ever imagined, live in an overpriced tiny apartment, and you are busy with your very first audit. Last night, you couldn’t fall asleep because of the street noise and the excitement of your move, so you stayed up far too late reading a book about creative accounting practices. The last chapter you read was called “Recognizing Premature and Fictitious Revenue”. You finally fell asleep thinking about the topic and its relationship to your first real audit. “Good morning. Please sit down,” Cee Peea says. “Are you enjoying your first assignment at College Business Computers?” “Oh Ms. Peea, I am really enjoying it.” You show your enthusiasm: “In fact, I was reading a book last night, to see how I could improve this audit.” “I’m impressed. What were you reading about?” she asks. “How to detect premature or fictitious revenue,” you answer, because the last chapter you read is the first one that now comes to mind. “I did not realize how pervasive this type of financial statement fraud is. It’s a big problem.” Now you are on a roll. Before Ms. Peea can even respond, you continue: “The Association of Certified Fraud Examiners did a fraud survey in 2004. It found that fictitious revenues accounted for 45 percent of financial statement fraud schemes. Schemes involving timing differences, which includes booking revenue prematurely, accounted for 25 percent of reported frauds. Consistent with this, an olde