Phar-Mor Inc.

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Title: Phar-Mor Inc.

Essay Details:

Subject: Business

Author:

Date: February 28, 2015

Level: University

Grade: A

Length: 2 / 383

Essay text:

Coopers & Lybrand won the Phar-Mor, Inc. account with a very low bid, so they wanted to limit their costs by testing only 4 out of the 129 stores. Phar-Mor made false entries to the inventory records to cover up money embezzled by management and they did this by monitoring the auditors’ test count procedures and found out which 4 stores were being tested in advance. This gave them the opportunity to stock up chosen stores with inventories from other locations and adjusted the books accordingly. 4. Some audit procedures that can detect overstatement of inventory: • Pay attention to the management assertion that inventory quantities exist...

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