Curriculum Guideline

Detecting Accounting Fraud

Effective Date:
Course
Discontinued
No
Course Code
ACCT 3850
Descriptive
Detecting Accounting Fraud
Department
Accounting
Faculty
Commerce & Business Administration
Credits
3.00
Start Date
End Term
201920
PLAR
No
Semester Length
15
Max Class Size
35
Contact Hours
60 hrs
Method Of Instruction
Lecture
Online
Hybrid
Methods Of Instruction

In-class lectures and/or on-line

Course Description
In this course, students will gain an understanding of the institutional and organizational conditions that lead to fraudulent financial reporting, failure of sound corporate governance practice and finally to share-price collapse in stock markets. Both the causes of these failures and their effects on business communities and society as a whole will be discussed. These issues will be examined through case studies of actual incidents of financial misreporting and stock market fraud that have occurred in a variety of organizations including private and publicly-traded corporations, government, and not-for-profit organizations. Reference will be made to standard ethical theories which will be reviewed. Students are recommended to take PHIL 1122 and BUSN 1320 prior to taking this course.
Course Content

1. Introduction to the ethical, moral and legal problem of fraudulent Financial Reporting.

2. Making ethical decisions in the business world; study of major philosophical frameworks for analyzing ethical dilemmas, as well as the most frequent “false exits”.

3. Improper recording of contingent sales and other unethical organizational behaviours. 

4. Moral and ethical dilemmas facing Accounting professionals invoved in holding books open after end of period, entering in multiple element contracts, recording fictitious revenue, improper Valuation of Revenue, submitting misleading Cash Flow Statements, and other professional unethical conduct including employee and employer conflicts.

5. Improper use of Business Combinations and capitalization of expenses.        

6. Immoral and unethical professional decisions such as those relating to deferral of expenses, failure to record expenses, overstating ending inventory, understating reserves for bad debts, failure to record asset impairments, and off-Balance Sheet arrangements.

7. Inadequate Disclosure in MD&A and related party transactions.

8. Unethical leadership as demonstrated during the Mortgage Crisis. 

9. Signals that may indicate possible fictitious reporting in financial statements.

Learning Outcomes
  • Analyze the ethical decision making process adopted by various international organizations, including International Accounting Standards Board
  • Demonstrate an understanding of the most frequent fraudulent business practices and GAAP departures in reporting used to: overstate revenue, understate expenses, in business combinations to overstate earnings, overstate assets and reserves.
  • Identify and analyze use of special purpose entities and round-trip transactions to falsify financial reporting
  • Analyze the importance of institutional and environmental influences, and how they can assist Accounting professionals and other citizens develop the ethical and moral values in their careers and their role as leaders.
Means of Assessment

Assignments and Case studies  30%

Participation 10%

Mid-term      25%

Final Exam   35%

Textbook Materials

Detecting Accounting Fraud: Analysis and Ethics. Cecil W. Jackson. Pearson/Prentice Hall

Current copy of the CPA Code of Professional Conduct

And/or other textbook and materials approved by the department

 

Prerequisites

ACCT 1210 with a C or better OR ACCT 1235 with a C or better