Genius Homey Bhd is a public company that operates in a highly competitive market for household products. The company is dominated by Bob, the chairman and chief executive officer, who has guided the company since it was a private company and has extensive influence on all aspects of company operations. Bob is known to have short temper and, in the past, has threatened individuals in the accounting department with no pay rise if they fail to help him to achieve company goals. Furthermore, the company has extended its influence over customers and has dictated terms of sale to ensure that customers are able to obtain desired quantities of their most popular products. Bonuses based on sales are a significant component of the compensation package for individual product sales managers. Sales managers who do not meet sales targets three quarters in a row are often replaced. The company has performed well up until a recent recession, but now the company is having difficulty clearing the inventory in most product lines as retailers have difficulty selling in a depressed economy.

Required:

(i) Identify THREE (3) types of potential fraud risk factors that are present in the case above. 

(ii) Identify the accounts and assertions that are most likely to be misstated based on the fraud risk factors noted in the case. 

Answer rating: 100% (QA)

Fraud Risk factors are events or conditions that 1 Indicate rationalizations or attributes to justif... View the full answer