hard20 pts · first answer countsinternal-controlsfinancial-statement-fraud

Money that goes round in a circle

A company "sells" software licences to Firm X, which soon after receives a consulting contract of about the same amount from the company. Cash leaves and comes back. What is the risk?

A.Round-tripping that inflates revenue without real economic substanceB.Normal barter trade that must always be recognised at full valueC.A timing difference that will reverse with no effect on profitD.An inventory valuation error caused by the licence pricing

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Money that goes round in a circle

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