Review the following and discuss in depth #2 which focuses no single ratio fitting all situations. Cite your statements with at least one source (no .com sources). To understand the use of radios I have attached a summary. (Do not use the information for the document attached for the response).

Per the 2014 Hunting the Big Cats of Fraud – Tips for Fraud Investigators

1. Ask as many questions as necessary, and evaluate the answers for reasonability. "If you don't understand something on a financial statement, or it seems unusual, ask for support documentation" "Test it for reasonableness in terms of your understanding of the company's expenses and income and the business environment in its industry and locality. If your reasonableness test reveals any red flags, perform ratio analyses. Be sure to compare the company with at least two others or with industry-wide values. Company statistics by industry — number of employees, sales and so on — are available online, and I've used them in numerous investigations. Some are available only by subscription, while others are free."

2. Be flexible. No single ratio fits all situations. So choose a ratio appropriate for your client's industry and type of business. If you can't find one, use a universally applicable calculation, such as days' sales outstanding in accounts receivable. Rratios don't prove fraud, but they can help you detect fraud that otherwise might not be evident.

3. Stay on track. "To conceal red flags, fraudsters will tell you that the support documentation you want isn't available," Sizemore says. "Most red flags have legitimate causes, such as management's inability to run the business effectively. But the only way you can tell is to check the support documentation," he adds.

4. Don't expect the auditors to catch everything. "CFEs need to understand the pressure on audit firms to keep their fees lower than those of their competitors," Sizemore says. "Since fees are based on billable hours, auditors must complete their engagements quickly. So they're tempted to minimize their review of support documentation and to not evaluate all fraud risk. Fraudsters take advantage of that."

5. Don't be fooled. Investigators should be professionally skeptical, asking for documentation that supports questionable assertions in financial statements. For example, if the documentation supporting accounts receivable indicates that a certain customer owes the company money, call that customer to confirm what the documentation says. Never be accusatory, but question as many people as necessary.

6. Anticipate the unlikely. "When you begin an engagement, always be mindful that it could wind up in court," Sizemore says. "I see it all the time: you get deposed, your report becomes a point of contention, and everything you said, your emails, your interview notes, end up being challenged. So do everything by the book and document it all. The case you think will never end up in court is the one in which you will end up testifying."