Reference no: EM133377328

What type of fraud involved and the lack of controls that allowed the subject company/organization to perpetrate in the Enron Fraud Case Study?

Types of fraud

1. Creation of a fictitious customer to which the company purportedly had sales.

2. Addition of fictitious sales to legitimate customers or inflating legitimate sales.

3. '"Round tripping" schemes involving sales to alleged customers and then providing funding in one manner or another to the customers to enable them to be able to pay.

4. Sales with special terms or conditions that allow customers to hold merchandise without an obligation to pay or that grant lenient return terms.

5. Recognizing revenue before all terms of an agreement have been satisfied.

6. Inflated or sham sales with related parties.

7. Improper application of bill and hold transactions.

8. Manipulation of percentage of completion contract revenue recognition.

9. Inappropriate accounting associated with channel surfing.

10. Unauthorized shipments to customers.

11. Keeping the books open beyond the end of a month/quarter/year in order to record additional sales.

12. Disguised consignment sales.

13. Manipulation of the timing associated with recognition of discounts and other incentives provided to customers.