Fraud Risk Brainstorming at Tesla Motors part 1 and 2

Question # 00632409
Subject: Communications
Due on: 02/11/2022
Posted On: 02/10/2022 07:06 PM
Tutorials: 1
Rating:
4.9/5
spqr
Posted By:
Questions:
119
Tutorials:
407
Feedback Score:
Report this Question as Inappropriate
Question Dot Image

Part I Case Requirements: Identifying Fraud Risk Factors

 

You should work individually to complete responses to each of the assigned case requirement questions using the information on Tesla Motors provided above and, where noted, in the case supplements, available for download in Appendix A. Your responses should be completed before proceeding to Part II.

 

  1. Fraud risks related to Tesla’s culture, leadership, and governance structure
  1. How would you describe the “tone at the top” set by Tesla’s leader, Elon Musk? How do Mr. Musk’s leadership style and his “tone at the top” contribute to possible fraud risk at Tesla Motors?
  2. How would you describe the company’s culture?  How might this culture create pressures and rationalizations for fraud?
  3. Review Tesla’s Code of Business Conduct and Ethics (see Tesla’s Code of Business Conduct and Ethics). How might any potential weaknesses in this code contribute to fraud risk at this company?
  4. Describe some possible concerns with Tesla’s board of directors. How might these concerns create opportunities and rationalizations for fraud?

 

  1. Fraud risks related to Tesla’s incentive structures and stock performance
  1. To what extent are executives and employees incentivized with shares and stock options (see Tesla’s 2015 Annual Report, Item 7 Management’s Discussion and Analysis (MD&A) and Item 8 Financial Statements and Supplementary Data section, Note 10)? How do these pay structures create pressures/incentives for fraud?
  2. Review Tesla’s stock performance over the last two years (refer to Exhibit 3). What fraud pressures does this stock performance create?

 

  1. Fraud risks related to revenue recognition at Tesla
  1. What does Tesla sell and how does the company account for revenue, accounts receivable, and COGS (see Tesla’s 2015 Annual Report, Item 1 Business, Item 7 MD&A, and Item 8 Financial Statements and Supplementary Data, Note 2)?
  2. How might these revenue recognition practices create opportunities, incentives, and/or rationalizations for fraud?

 

  1. Fraud risks related to Tesla’s business and operating conditions
  1. Review the business risks disclosed by the company (see Tesla’s 2015 Annual Report, Item 1A Risk Factors and Item 8 Financial Statements and Supplementary Data, Note 2 and Note 13). How might some of these business risks from the external environment also create fraud risks within Tesla?
  2. What fraud risks are posed by Tesla’s expansion plans and the company’s ability to operate as a going concern (see Tesla’s 2015 Annual Report, refer to Item 1A)?
  3. What related party transactions support Tesla’s financial performance (see Tesla’s 2015 Annual Report, Item 1 Manufacturing)? How might these transactions create opportunities for fraud?

 

  1. Fraud risks indicated by the results of preliminary analytical procedures
  1. What fraud risks may be indicated by the year-to-year comparisons of Tesla’s financial statements (refer to Exhibits 1 and 2)?
  2. How does the company perform relative to its peers (refer to Exhibit 4)? Do these ratios and trends seem reasonable?

 

 

 

 

Part II Case Requirements: Conducting a Fraud Brainstorming Session

 

In Part II of this case, you will work in a group to simulate an audit team conducting a fraud risk brainstorming session for Tesla Motors. Your instructor will provide you with further instructions regarding the composition of your audit team and the timing of this brainstorming session. The following case requirements will help guide your activities in this simulated brainstorming session.

 

  1. Conducting the Fraud Brainstorming Session

 

  1. Share and discuss your individual responses to each of the case requirement questions from Part I.
  2. Work together to develop a fraud risk matrix (see Exhibit 5 for an example) identifying the three fraud risk factors that your team believes present the greatest concern to the audit based on your team’s assessment of their likelihood and significance.  Focus on those fraud risk areas that pose the greatest potential threat for a material misstatement in the financials.
  3. Determine how the nature, timing, and extent of the audit procedures should be altered to respond to these identified risks.

 

  1.  Documenting the Results of the Fraud Brainstorming Session

Document your conclusions from this brainstorming session in a memorandum for the audit file. A template for your reference is included in Appendix B. Your documentation should include:

    1. The date, the attendees, and the purpose of the session, as well as how long the session lasted.
    2. The three most concerning fraud risks at Tesla, the potential fraud schemes and account balances that would be affected, and the group’s assessment of the likelihood and significance of such schemes occurring in a fraud risk matrix (from 1b above).
    3. The team’s consensus (or lack thereof, if applicable) regarding the overall risk of fraud at Tesla Motors.

The team’s plan for adapting the nature, timing, and/or extent of audit procedures to respond to this fraud risk assessment.

Dot Image
Tutorials for this Question

Fraud Risk Brainstorming at Tesla Motors part 1 and 2

Tutorial # 00631259
Posted On: 02/10/2022 07:07 PM
Feedback Score: Not rated yet!
Purchased By: 3
spqr
Posted By:
Questions:
119
Tutorials:
407
Feedback Score:
Report this Tutorial as Inappropriate
Tutorial Preview
The solution of Fraud Risk Brainstorming at Tesla Motors part 1 and 2...

Great! We have found the solution of this question!

Related Questions
Visit this site and read the brief description about Monopoly and Life. 
Visit this site and read the brief description about Monopoly and Life.  https://www.moneyschool.org.au/teaching-kids-about-money/seven-ways-monopoly-is-like-real-life/ (Links to an exter …
Visit this site and read the brief description about Monopoly and Life. 
Visit this site and read the brief description about Monopoly and Life.  https://www.moneyschool.org.au/teaching-kids-about-money/seven-ways-monopoly-is-like-real-life/ (Links to an exter …
NU643 Advanced Psychopharmacology Psychosis Case Study Assignment
"In this assignment, you will review the Psychosis Interactive Case Study patient scenario and analyze the data to determine the health status of the patient. You will need a minimum of two evide …
What are your views/opinions on this topic?
Discussions:  Posts must be thoughtful, informative, with response based on scientific facts.   Please review the following video:     https://www.youtube.com …
nurs6512 latest 2022 January final exam 2 versions 100 questions each all graded
nurs6512 latest 2022 January final exam 2 versions             Question 1 2 out of 2 points Recommended carbohyd …
Write a paper summarizing the film and making connections to sociological concepts - film 13th
Write a paper summarizing the film and making connections to sociological concepts and theories. The film is called 13th …
hannah collins i human all
hannah collins i human all …
I HUMAN CASE STUDY (TINA SANDLER)  
I HUMAN CASE STUDY (TINA SANDLER)     PATIENT NAME – TINA SANDLER AGE - 29 YEARS  SEX - FEMALE HEIGHT – 5’5” (165 cm) WEIGHT - 160.0& …
6630 week 4 assignemnt
Assignment: Assessing and Treating Pediatric Patients With Mood Disorders When pediatric patients present with mood disorders, the process of assessing, diagnosing, and treating them can be quite c …
Compose a focused paper that explains and describes your healthcare
                Scientific and Mathematical/Analytical Perspectives of inquiry        & …
Recent Questions
Discuss the importance of the landmark case Miranda
Instructions Discuss the importance of the landmark case Miranda v. Arizona. Now pick one of the following cases: Berghuis v. Thompkins, Maryland v. Shatzer, McNabb v. United St …
PAD630 Public Administrators Introduction & Theoretical
PAD630 Everest Public Administrators Introduction & Theoretical Overview PAD 630 Milestone One Guidelines and Rubric Understanding the organizational, legal, and cultural differences between …
Grantham CJ309 Chapter 6 Challenges of Booby Traps
CJ309 Grantham University Chapter 6 Challenges of Booby Traps Paper Booby Traps = Justified? In a two to three page paper, please discuss the following issue. Remember to use appropriate APA for …
RICO Counterfeit Merchandise Organized Crime Anlaysis
RICO Counterfeit Merchandise Organized Crime Anlaysis Analyze the primary manner in which the purchase of fake handbags or other counterfeit merchandise may impact all areas in our lives. Next, bas …
Grantham CJ309 Insanity Defense
CJ309 Grantham University Insanity Defense Paper Insanity Defense Write a one to two page paper exploring the use of the defense "insanity." Please use one (or more) of the following e …
Roe v Wade Landmark Decision Involving Womens Rights
Roe v Wade Landmark Decision Involving Womens Rights Discussion Roe v. Wade is a landmark decision involving women’s rights. So why is it discussed in a criminal law class? Roe v. Wade is als …
Returning to an Annotated Bibliography
Returning to an Annotated Bibliography Add seven more sources to your annotated bibliography you started in Unit 5, and review the study in Unit 7 for finalizing this assignment. Follow the guideli …
Unit 7 Cross Burnings Virginia v Black Supreme Court
Columbia Southern Unit 7 Cross Burnings Virginia v Black Supreme Court Questions Refer back to the two reading assignments for this unit. Then, write an essay that addresses the areas listed below. …
Challenging Offender Thinking - Mutual respect and consent
Challenging Offender Thinking INTRODUCTION Mutual respect and consent between the counselor and client are fundamental to an ideal therapeutic relationship. This is rarely the case in correction …
Correctional counselors serve an integral role in the corrections
Correctional counselors serve an integral role in the corrections process. Responsibilities are vast and affect numerous stakeholders. While there are many opportunities to make a considerable impact …
Loading...