Reference no: EM132319461

Question

Let say you are auditing a company that is committing a fraudulent activity, for example; overstating their assets and inflating their earnings.

How would you detect the overstatement of asset (Improper Asset Valuations)?
And how would you prevent it? (optional)

Additional Info: Many fraud schemes involve the "hiding" or misplacement of debits on the balance sheet that should be recorded on the income statement. These debits are often improperly recorded as assets or a reduction to existing liabilities. Overvaluing assets is often considered a "simple" way to directly manipulate reported earnings.