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.

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Definitions:

Null Hypothesis

A statement or idea that suggests there is no statistical significance or effect between certain observed phenomena or variables.

Wilcoxon Rank Sum Test

A nonparametric statistical test that compares two independent samples to assess whether their populations have the same distribution.

Height Centimeters

A measurement of how tall a person or object is, specified in centimeters.

Observations Rank

The process of assigning ordinal ranks to data points based on their value or position relative to other points in the dataset.