6-2 Project Two Milestone: Data Analysis and Fraud

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ACC 691 Project Two Milestone Guidelines and Rubric

Scenario

You are a due diligence analyst at a bank and must review a completed loan application for Decker Manufacturing and determine whether the loan will be approved or denied. You’ve already completed the horizontal and vertical analyses of Decker Manufacturing’s income statement and balance sheet. You must now calculate ratio analyses to form a fraud hypothesis for red flags for potential fraud that your supervisor identified after reviewing your work on Decker Manufacturing’s horizontal and vertical analysis. The loan officer reviewing this application has also asked you to determine what additional data and calculations would help in determining the likelihood of fraud in each of these cases. After performing the calculations, you must determine whether the data supports or refutes the fraud hypotheses and email your loan officer the results.

The skills practiced in this assignment will help to support your work in Project Two.

Directions

Use the knowledge you gained from this module’s resources to identify data and evidence for fraudulent activity and develop a fraud hypothesis. There are two parts to this milestone.

Specifically, you must address the following rubric criteria:;

Part One:

Excel Calculations and Fraud Hypotheses

For Part One, use the Excel template in the

What to Submit

section to show your work in calculating the ratio analyses. Additionally, create a fraud hypothesis related to each specific red flag in the Excel template in the What to Submit section.

Calculate ratiosfor the data set provided. Include the following in your response:

Current ratio

Quick ratio

Percentage of doubtful accounts

Interest rate on long-term debt

Classifying interest expense as other expense

Research and development ratio

Research and development as a percentage of intangible assets

Create a fraud hypothesis related to each specific red flag.

Explain whether the data from the calculations supports or refutes each fraud hypothesis.

Part Two:

Summary Email

For Part Two, write a summary email in a separate Microsoft Word document that describes the data from the work you did in Part One.

Explain the fraudulent activity related to each supported fraud hypothesis.

Summarize the results in a summary email.

What to SubmitExcel Calculations and Fraud Hypotheses

Using the Project Two Milestone Template, complete the Excel calculations and fraud hypotheses in Part One of this milestone.

Summary Email

Complete the Part Two summary email in a separate 1- to 2-page Word document with double spacing, 12-point Times New Roman font, and one-inch margins. Sources should be cited according to APA style.

Submit both for grading.

Supporting Materials

The following resource supports your work on this presentation:

Resource: Decker Manufacturing Financial Statements

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