Problem

The popular press has indicated that inventory fraud is one of the biggest reasons for the...

The popular press has indicated that inventory fraud is one of the biggest reasons for the proliferation of accounting scandals. (a) Name two other high profile cases where a company has committed fraud by misstating inventory. (b) What makes the intentional misstatement of inventory difficult to detect? How was Phar-Mor successful in fooling Coopers&Lybrand for several years with overstated inventory? (c) To help prevent or detect the overstatement of inventory, what are some audit procedures that could be effectively employed?

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Solutions For Problems in Chapter 4.6