A COVID-19-Related Fraud at Applied BioSciences Corp.: What Are the Lessons?

Abstract

This case is based on fraudulent COVID-19-related press releases by Applied BioSciences Corp. (ticker symbol: APPB), as well as the related SEC and city and county of Los Angeles complaints against the company. This is an innovative, interesting, and applicable real-world case for students to explore fraud and ethical frameworks. Students perform detailed financial statement and fraud triangle analyses, and the case’s critical thinking activities are appropriate for students in auditing, fraud, intermediate accounting, financial reporting, and forensic accounting courses. Lessons learned by students from answering the case questions may help alert them to future fraud schemes, ethical dilemmas, intricacies in evaluating intangible assets, and governance failures in engagements encountered in their professional lives.