Scenario:
A few years ago, the top executive of a large oil refining company (based in New York) was convicted of financial statement fraud. One of the issues in the case involved the way the company accounted for its oil inventories. In particular, the company would purchase crude oil from exploration companies and then process the oil into finished oil products, such as jet fuel, diesel fuel, and so forth. Because of the ready market for these finished products, the company would record its oil inventory at the selling prices of the finished products less the cost to refine the oil (instead of at cost) as soon as it purchased or discovered the crude oil. In addition to the fraud in the case, the type of accounting was questioned because it allowed the company to recognize profit before the actual sale (and even refining) of the oil. This method was even attested to by one of the large CPA firms.
Questions:
If you were the judge in this case, would you be critical of this accounting practice? Why or why not? Consider these questions and then post whether or not you believe this type of accounting practice should be criticized and whether or not this rather “aggressive” accounting was a warning signal that fraud might be occurring.
Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.
You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.
Read moreEach paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.
Read moreThanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.
Read moreYour email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.
Read moreBy sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.
Read more