Explain How Revenue Accounts Are Especially Susceptible to Fraud

question 28

Essay

Explain how revenue accounts are especially susceptible to fraud.

---

Definitions:

Deferred Taxes

Taxes that are owed but not yet paid, arising from temporary differences between accounting and tax treatments of income and expenses.

Retrospective Adjustment

A change applied to the accounting records of prior periods to correct an error or implement a change in accounting principle.

Cumulative Effect

The aggregate impact of an accounting change or policy on a company's financial statements over time.

Average Cost

A method for inventory and cost of goods sold valuation, calculated by dividing the total cost by the number of items.