The aquamarinic Sky

Topics: Auditing, Audit, Financial audit Pages: 3 (582 words) Published: April 21, 2014
I have never seen such a beautiful aquamarinic sky, such blue, much gentle.

It reflects the color of our oceans blue, oh what a beauty.

I'd kill to fly a day and rest against a cloud.

Effects of the SEC investigation on investor confidence

* All sales of Flashwall 2011 have been made to only one customer , which in the near the near future will be a related party

Financial Accounting/Reporting Risks: Fill in the table below by completing the final box for the first risk and by identifying two additional financial accounting/reporting risks through examination of Flash’s financial statements and related disclosures (e.g., significant or unusual increases in ending balances, unexpected patterns such as slower growth in accounts receivable than sales, unexpected differences between Flash’s ratios and the industry averages). The two additional risks included in the table below should be the financial accounting/reporting risks you consider most significant.

Financial Accounting/Reporting Risk| Audit Risk (auditor’s concern) | Related Accounts and Assertions | Potential Effect on the Audit Plan|

1. Inventory turnover is much lower than the industry | Overstatement of inventory due to obsolescence. Is inventory properly valued at the lower of cost or market? | Inventory:ValuationExistence| |

2.| | | |

3.| | | |

Additional General and Industry Risks: Provide a list of additional financial accounting/reporting risks you identified. You need only list the risk, no need to fill out a table as shown above. You should identify at least three additional risks beyond those listed above.

Case 4.6 Phar-Mor, Inc.

Case 4.6 Phar-Mor, Inc.

6. A) Other high profile cases where a company has committed fraud by misstating inventory include Comptronix Corporation and Bristol-Meyers Squibb Company.

B) It is particularly difficult to detect intentional misstatements of inventory because manual checks of inventory only occur semi-annually,...
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