Case 1.8 Crazy Eddie

As focusing on each of the five management assertions for the inventory account, we discovered that there are some risky areas that indicate the need for further attention during the audit. First of all, for existence or occurrence, all items in the inventory account must physically exist and be available for sale. Thus, the auditors should physically count finished goods, copper rod, and plastic inventories, and determine actual increase of inventories at year end. Also, they should select items from the inventory ledger and locate them and reconcile the quantity. Second, for completeness, the auditors should make sure that all existing inventories have been recorded completely , go around the warehouse and ensure all the inventories are recorded in the inventory ledger. Third, for valuation or allocation, the auditors should make sure that Laramie Wire manufacturing sticks with one valuation method(For inventory items, valuation is based on the lower of cost or market value, with several alternative methods for calculating cost), find out if there is any scrap inventory that needs to be recorded and written off ,and ask about obsolescence items. Fourth, for rights and obligations, the auditor should ask them if there is any consigned inventory at their warehouse. If there is, those inventories should not be recorded in the company's inventory ledger. Finally, for presentation and disclosure, the auditors should review the company's financial

This memo is intend to present appropriate treatment of the ARO estimation problem experienced by the Lack of Information (LOI) based on the findings from interviews with all 50 of the warehouse managers and on-site visits at each of the 50 locations of its warehouses countrywide. The onsite observations search for any evidence of damages in both the on-site property like the roof, walls, floors and general conditions. The interview with the managers obtains information about the characteristics of the warehouses that are not readily observable. The information obtained is very important in the preparation of the fiscal

HISTORY OF PRESENT ILLNESS: This is a 53-year-old black individual a patient of Dr. Shelton, who has had diabetes for at least six months, but he thinks it has been longer than that. He says his last known blood sugar was in the 300’s. He presents in the ER today with a foot ulcer since January of this year. He

13.2: Some ways nursing homes can signal high quality to consumers are by portraying: cleanliness of the nursing home, respectful treatment and attitude towards residents (bedside manner), and proper record keeping of all medical documents. The most reliable signal may be the record keeping because those are to be handled professionally at all costs of the organization. Without proper record keeping, there is little to no quality.

Despite Vonkel’s desire for expansion and growth, Thembeka have experienced an overall profit loss for the past five years. An initial investigation into the company’s finances reveal that there is an overall business turnover of about $63 million (USD), and the cost of inventory alone is $27 million USD. Over 80 percent of the company’s total inventory consists of finished product. Inventory is inconsistently categorized, which also leads to a longer lead time for the organization to fulfill orders. Most of the inventory is held in various retail outlets that Thembeka own, and in franchises where Thembeka own the stock.

Crazy Eddie Inc. was a retail consumer electronics store in New York City. By 1987, Crazy Eddie Inc. had 43 retail outlets, sales exceeding $350million, and outstanding stock with a collective market value of $600 million. Doubling in the four-year period from 1981 to 1984, sales in the consumer electronics industry exploded. Eddie Antar, the owner of the Crazy Eddie, Inc. converted his stores into consumer electronics supermarkets. Antar stocked the shelves of Crazy Eddie's retail outlets with every electronic gadget he could find and with as many different brands of those products as possible. Compute key ratios for period 1984-1987 Inventory turnover 4.58 3.9 3.25 2.5The Inventory turnover rate steadily

This paper covers the accounting errors related to freight costs that led Overstock.com in 2006

[pic]s a senior in a professional services firm, you have been assigned to plan the financial statement audit of a private company named Toy Central Corporation (TCC). In addition, the partner on the engagement has asked you to identify business risks that could adversely affect TCC’s sustained profitability, so that they can be brought to the attention of the company’s board of directors. These tasks will require you to draw on your knowledge of supply chain management, marketing, internal controls, audit assertions, and financial accounting.

This set of data belongs to the online retailer industry. The most significant categories that helped with our decision was the low inventory for a retail business and the relatively high inventory turnover. The reasoning behind the high inventory turnover was because the goods were allowed to sit in storage until sold because of the online aspect of the business. We were also able

The term lowballing in an audit context implies that the auditor is pricing its auditing services way below competition in order to get the business. The quote for the auditing services may be at or even below

With this company the inventory management ratios further indicate that there may be an issue with inventory and inventory controls. The inventory turnover ratio is lower than the industry average and the days’ sales in inventory are high. A company wants to turn inventory quickly to reduce storage costs, and

When offers of reduced pricing are accepted for equipment, meeting delivery expectations becomes an important part of enhancing the customer experience to maintain satisfied loyal customers. An inventory specialist in the current distribution center would be given the additional task of segregating and maintaining inventory levels to meet the needs of the customer loyalty department.

Jones over forecasts his inventory and has a low inventory turnover ratio. This drastically increases his accounts payable, as he isn’t able to pay due to low cash inflow. His account’s payable increased by nearly 9 percent in 2006. Nearly half of his current assets are in inventory. Also Jones isn’t able to take advantage of the cash discounts offered by his suppliers due to his slow cash collection process. In order to perform well, the company must improve its inventory system and its cash collection policies.

In Crazy Eddie Case, a former CPA, Sam E. Antar, was a key individual who helped Eddie Antar mastermind one of the largest securities frauds uncovered during the 1980s. Sam admitted that he had no empathy whatsoever for investors because he never concerned about morality or the suffering of those victims. Next I’ll analysis Crazy Eddie Case from ethical perspective and use Ethical Decision Making Model to evaluate Sam’s possible behaviors.

In the case “Rusty and Dusty Slow Movers,” Penny is the first Controller hired at a medium-sized farm machinery company. One of her initial goals as a controller is to determine how accurately the inventory on the books reflects its fair market value. The company acquired and repossessed equipment that is hard to sell, and she noticed that there were many dusty machines when she checked inventory pallets. Ron, the inventory control clerk, informed her that most are either from overruns or the recession. Moreover, when the inventory sells, it is sold at a significant discount. Penny discussed the matter with Art, the Company President. Art told her that he believed that many of these items are sellable given appropriate marketing and the right economic conditions. He does not want to write-down the inventory because he is concerned it will negatively impact the profit. Art has indicated that she should help falsify records if it looks like auditors could discover the slow moving inventory.