Reference no: EM131241595

Question 1

The process to record revenues properly has been defined by specific guidelines and principles of which you will learn in this class. There are business types and individuals that will test the limits of hiding monies from the IRS, local or state authorities.

Please research your states auditor's office, local taxing authorities or the IRS website to present a case that depicts fraudulent activities as it relates to revenues. Please state your reasoning as to why you choose the case; how you would have gone about investigating the case and controls you would put in place to prevent any future frauds of this type.

Respond to this...The case I chose to discuss is one of a woman who is facing charges from 10 tax-related felonies. This woman, Diane Marie Loon, had her own tax service filed thousands of tax returns for other people, but did not file her tax return between 2010 and 2014. The reason this case jumped out at me is because of how ridiculous it is. This woman has her own tax company, which means she knows the laws and such - why would she think she could get away with not filing her OWN taxes for so many years? She was not paying income tax, which is a big no-no. The amount of fines and prison time she could serve is way more than what she would paid had she just filed her tax returns in a timely fashion. Maybe she was hiding something? I would have gone through all of her banking records to see if she had a gambling problem or something of that sort. I would also review all of her purchases on her credit cards, etc. I'm not sure there are any controls that could be put in place in order to make sure people file their tax returns, it's not like we can go door to door and verify if people have filed their returns.

https://hometownsource.com/2016/10/01/cambridge-woman-charged-with-multiple-tax-crimes/

Question 2

There are various virtues and detriments that are debatable about the steady rise of business combinations worldwide. Some of these issues deal with value chain control, diversification, risk dilution, monopolism, tax loss to the US, etc.

Conduct Internet research to locate an issue relating to business combinations. Post your findings. Discuss whether you feel this is a virtue or detriment. Explain.

Respond to this...One of the more recent mergers that comes to my mind is the merger of AT&T acquiring DirecTV. This merger was talk around the office I work in for a long while (since the company I work for represents the telecommunications industry). The merger could turn out to be either a virtue or a detriment.

POSSIBLE PROS (of this merger):

Could give customers a larger variety of options or increased offerings to choose from.

Bundling the services could be more cost effective for customers.

A larger company can usually get better rates by having more customers.

A larger company usually has more money or financing options for network upgrades and improvements so customers could receive a lot better and bigger services than they currently do.

POSSIBLE CONS (of this merger):

Could give customers fewer options of providers.

Could result in price hikes if there are fewer providers available.

Less industry competition may result in monopolizing of the market by just a few large competitors where price and service could both suffer.
Dawnelle Schmidt

https://www.washingtonpost.com/business/technology/atandt-directv-announce-48-billion-merger/2014/05/18/62ffc980-dec1-11e3-810f-764fe508b82d_story.html

https://about.att.com/story/att_completes_acquisition_of_directv.html

Question 3

There are many types of business organizations. They may be service, merchandising, or a combination of these. How would the company's line of business affect the design of its accounting information system? Give an example of at least two different types of companies and identify the basic activities and transaction cycles in each. What differences and similarities do you see between the companies?

Respond to this...Accounting information system are used differently depending on the type of business organization. I currently work in a chiropractic office that uses an accounting information system to track income, costs, pay bills, pay employees, tax liabilities, budget plan and financial reports. In the office, we have a separate program that tracks the individual service activities along with insurance claims, patient records and etc. But if we were in a merchandising business we would probably use the accounting information system to track inventory, purchases, invoicing along with the other transactions we use in the service business.