Reference no: EM132319455

Question

Propose an audit a procedure you would utilize to detect the irregular transactions, if you were the auditing a company.

Improper Asset Valuations - There is often a direct relationship between the overstatement of assets and inflation of earnings. 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 relatively "simple" way to directly manipulate reported earnings.