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Fraudulent Sales Are Occasionally Recorded at Year-End as a Means

question 41

Essay

Fraudulent sales are occasionally recorded at year-end as a means of overstating financial results.As examples,companies may engage in inappropriate bill and hold transactions or channel stuffing.
a.Describe two conditions that might indicate the recording of fraudulent sales.
b.Define bill and hold transactions and describe the audit significance of such transactions.
c.Define channel stuffing and describe the audit significance of this practice.


Definitions:

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