Coupon Accounting Abuse Case Study Example | Topics and Well Written Essays - 1000 words

Coupon Accounting Abuse - Case Study Example From this paper it is clear that an efficient control environment should have both preventive and detective measures against fraudulent activities. The preventive measures aim to dissuade any chances of fraud or errors and they include the implementation of thorough documentation and authorization practices in the company. In this instance, the company should have had an authorization channel in place such that for one to alter the income statement as Larry did, there had to be proper authorization and documentation to support this. This would therefore ensure that the transactions are accurate and complete, and the proper documentation provides evidence of all transactions. Detective measures would ensure that undesirable activities like fraud are identified. Reconciliation of transactions and their supporting documentation would identify any cases of fraud within the company. This would ensure that financial information is accurate and valid and that any unauthorized alterations of transactions do not occur. Therefore, in Larry’s case, his alteration of the expense estimate for the new coupon would have been detected if proper control measures had been in place. A company must take preventive steps to protect the company from abuse from its employees and management. Preventive measures require efficient processes and should identify any risks that the company is prone to. There are two fundamental activities that act as deterrents of errors and fraud; documentation and authorization. Documentation is anything that provides evidence of a transaction; it may be in form of paper or electronic communication. This ensures the accuracy and completeness of transactions since the documentation provides a record of all the events and activities that have transpired as well as giving information whenever a discrepancy occurs.

Price Analysis Essay Example | Topics and Well Written Essays - 500 words

Price Analysis - Essay Example The basis of certain agreed conditions such as the quality and the time taken to perform the contract determines the price. Some government contracting characteristics affect fair and competitive pricing. The characteristics are usually statutory and regulatory limitations. Decision to contract: This entails determination of need. Fulfillment of the standard of competition must be achieved when the contractor can conclude that the submission of the proposal adhered to expectation of competition. In order to predict the expected price of an acquisition we consider two components, the Purchase consideration and other costs directly associated with the acquisition (Drury, 2008). Purchase consideration includes assets exchanged, liabilities assumed, and Shares issued. Other costs include accounting fees, consultancy fees and legal fees incurred. Direct costs are production costs that can be directly identified and assigned to the final product. Indirect costs are general expenditures incurred for various or shared projects, activities and thus cannot be specifically identified with the final product. Direct costs can be allocated on the usage basis, time basis, effort basis, square footage basis and clients served allocation basis (Drury, 2008). Indirect costs maybe identified as fixed costs, and their allocation is usually easy. This includes salaries and wages allocation to managers and other personnel not directly engaged in the production process. Rent and office supplies are charged to each department. In this department, machines and other fixed assets undergo depreciation. Cost analysis is the examination of distinct elements e.g., labor that constitute a contractors total cost proposal or the price to determine if they are appropriate (Murphy, 2009). Whenever one is, comparing lump sum prices the use of the cost and price analysis becomes essential.