For each of the following situations, state whether you agree or disagree with the nancial reporting practice employed,
and briey explain the reason for your answer.
1. the controller of the dumars corporation increased the carrying value of land from its original cost of $2 million to its
recently appraised value of $3.5 million.
2. the president of vosburgh industries asked the company controller to charge miscellaneous expense for the purchase
of an automobile to be used solely for personal use.
3. at the end of its 2013 scal year, dower, inc., received an order from a customer for $45,350. the merchandise will ship
early in 2014. because the sale was made to a long-time customer, the controller recorded the sale in 2013.
4. at the beginning of its 2013 scal year, rossi imports paid $48,000 for a two-year lease on warehouse space. rossi
recorded the expenditure as an asset to be expensed equally over the two-year period of the lease.
5. the reliable tire company included a note in its nancial statements that described a pending lawsuit against the
company.
6. the hughes corporation, a company whose securities are publicly traded, prepares monthly, quarterly, and annual
nancial statements for internal use but disseminates to external users only the annual nancial statements.

Each of the following scenarios is based on facts in anactual fraud. categorize each scenario as primarily indicating (1) anincentive to commit fraud, (2) an opportunity to commit fraud, or(3) a rationalization for committing fraud. also state your reasoningfor each scenario.a. there was intense pressure to keep the corporation ' stock from declining further. this pressure came from investors, analysts,and the ceo, whose financial well-being was significantly dependent on the corporation ' s stock price.b. a group of top-level management was compensated (mostly in the form of stock-options) well in excess of what would be considered normal for their positions in this industry.c. top management of the company closely guards internal financial information, to the extent that even some employees on a “need-to-know basis” are denied full access.d. managing specific financial ratios is very important to the company, and both management and analysts are keenly observant of variability in key ratios. key ratios for the company changed very little even though the ratios for the overall industry were quite volatile during the time period.e. in an effort to reduce certain accrued expenses to meet budget targets, the cfo directs the general accounting department to reallocate a division’s expenses by a significant amount. the general accounting department refuses to acquiesce to the request, but the journal entry is made trough the corporate office. an accountant in the general accounting department is uncomfortable with the journal entries required to reallocate divisional expenses. he brings his concerns to the cfo, who assures him that everything will be fine and that the entries are necessary. the accountant considers resigning, but he does not have another job lined up and is worried about supporting his family. therefore, he never voices his concerns to either the internal or external auditors.f. accounting records were either nonexistent or in a state of such disorganization that significant effort was required to locate or compile them.