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What are some examples of tactics that have been used to manipulate the amount of income reported in cases of financial reporting fraud? Please explain

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I’m working on a accounting writing question and need an explanation and answer to help me learn.

1. What is the expectations gap? Please explain. 2. What is corporate management’s responsibility in regard to a corporations internal control system and how does that differ from the auditors’ responsibility?
3.What are some possible reasons why financial statements are materially misstated?
4.What are some examples of tactics that have been used to manipulate the amount of income reported in cases of financial reporting fraud? Please explain

5. What is the auditor’s duty if the auditor finds that the audit client has been involved in an illegal act? Please explain.
6. An auditing firm completed and audit of a corporation’s financial statements and the auditors failed to detect significant misstatements in reporting income and asset value due to a carefully constructed scheme of misleading transactions. The corporation filed for bankruptcy and the auditors were sued for negligence. What are some of the defenses that the auditor firm might use in the court case? Please explain.

7. In a fraud situation, who is the most likely perpetrator? Explain.
8. In accordance with paragraphs .05, .06 and .07 of PCAOB AS 18, are required to inquire about related party transactions. Who should auditors interview? Explain.

9. What is a Big Bath charge off? Explain.

10. What are Cookie Jar Reserves? Please explain.


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