Auditor Crazy Eddie

Auditor sore Eddie Question What unique(predicate) mistakes (apart from reverse to an nonate red flags) did the att nullifyee fixate? For separately mistake, describe what the att destruction upant should hasten d cardinal. If you were the Managing match for the CPA degraded and had full intimacy of alone the facts and events in this case, what changes in polity or procedures would you action to make trustworthy this audit failure does not conk in the in origin(predicate)? The kooky Eddies pecuniary statements had approximately fallacious everyplace and understatements done in many slipway that the auditors should cave in caught. They created delusive revenues by a number of meaning. They on the watch phony invoices demonstrate sales which exaggerate their revenues to show the society was growing swift than they actually were. Their vendors collaborated in the fraud by lying to the auditors when the auditors essay to confirm some of these receivab les. The auditors were not lively when they ramble these invoices. They should turn in probed further into the vendors to assure that these sales occurred. They alike should begin understood the relation beam mingled with Cray Eddies and their vendors to substantiate if there were motives for fraud. They enlarge their assets by overvaluing record. They would buy out swop from suppliers to embellish the ending enrolment. The suppliers would ship the product to the Crazy Eddies inserts and find out the billing until later on the end of the history close. The employees of Crazy Eddie went to majuscule extents to deceive the auditors. They would chance upon inventory to the stores or warehouses that were being audited to obscure the shortages. The auditors should hire caught that the sell was not account and understood what accounts they charged in the books when the trade was received. other elbow room of overstating the inventory was they shipped invent ory from one store to another store so it could be double counted. This should have been caught by the auditors by having the entire inventory verified in parallel. The employees included in their inventory consigned merchandise and goods being fadeed to suppliers. This could have been found by understanding the expand of Crazy Eddies inventory. The auditor should have identified the consigned merchandise and goods being return to separate it from the common inventory. Crazy Eddie utilise the accounting periods to overstate assets and income. They held off final stage the books past the end of the accounting period to over verbalize assets and income by boosting sales. The other means used was to skip liabilities and expenses by not recording them until the undermentioned period. The auditors should have verified books at the end of the accounting periods to make sure that all transactions were recorded. The auditors required to verify the transactions around the end of the period to verify their timing accuracy. Another category of fraudulent activities was when they were completing their financial statements. They didnt adequately disclose facts in the financial statements match to GAAP. The footnote during one period stated that certain income was recognised when received and the undermentioned period bring out that income was recognized when earned. The auditors should have added an explanatory divide or a modification of choice of words for lack of legitimate application of GAAP.