Scribd
Upload
1K views2 pages

Chapter 17

The document outlines relevant accounts for debt obligations and stockholders' equity transactions. It identifies common transactions that affect stockholders' equity accounts, such as new stock issuances, treasury stock purchases, and dividend declarations. The document also describes fraud risks associated with debt obligations and stockholders' equity accounts, such as unauthorized or misclassified debt, incorrectly recorded interest expense, and stock sales or dividends that are not properly authorized.

Uploaded by

Jomer Fernandez
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
1K views2 pages

Chapter 17

The document outlines relevant accounts for debt obligations and stockholders' equity transactions. It identifies common transactions that affect stockholders' equity accounts, such as new stock issuances, treasury stock purchases, and dividend declarations. The document also describes fraud risks associated with debt obligations and stockholders' equity accounts, such as unauthorized or misclassified debt, incorrectly recorded interest expense, and stock sales or dividends that are not properly authorized.

Uploaded by

Jomer Fernandez
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
You are on page 1/ 2

1. What are the relevant accounts related to debt obligations?

 Bonds payable
 Interest expense
 Gains or losses on refinancing debt
 Notes payable

2. What are the relevant accounts related to stockholders’ equity transactions?


 Stock accounts (common, preferred, and treasury)
 Additional paid-in capital
 Dividend accounts
 Retained earnings
 Activities Related to Stockholders' Equity

3. Identify common transactions affecting stockholders’ equity accounts.


 New stock issuance's
 Purchase of treasury stock
 Declaration and payment of dividends
 Grants of stock options and warrants
 Exercises and expirations of stock options and warrants
 Transfer of net income to retained earnings
 Recording of prior-period adjustments to retained earnings

4. Identify fraud risk associated with debt obligations.


 Debt obligations are not properly authorized
 Long-term or short-term debt is mis-classified
 Interest expense is recorded in the wrong period, at the wrong amount, not recorded
at all, or is mis-classified.
 Entire loan payments are charged to either principal or interest.
5. Identify fraud risks associated with stockholders’ equity accounts.
 Stock sales or issuances are not authorized.
 Stock sales or issuances violate debt covenants.
 Stock sales or issuances are not recorded.
 Stock options exercised are not authorized or are not in accordance with the terms
of options granted.
 Stock options are backdated.
 Dividends are paid in violation of restrictive covenants.
 Dividends are paid to wrong parties or at incorrect amounts.
 Proceeds from stock sales are misappropriated.

You might also like