Case 6.2

1. DeBurgers task on the Marcelle examine was to develop a two page memo in which he summarized 900 hours of wee that had been completed with the assistance of five internal studyors and two round accountancyants over a two month period. Marcelles at one time strong monetary standing was deteriorating due to a fight economy increasing competition and Marcelles suppliers were beginning to fling their prices, significantly cutting into the stores reach. Marcelle previously posted a profit of less than $8 million prior to their current audit; the companys pre-audit net income posted at an unmeasured $500,000.
This case relates to practice issues in regards whether or not to be sick an error to the sample population. This case is unique in the incident that its hard to parallel it to other cases discussed in tell thus far. DeBurger had no specific evidence that the inventory account balance was materially misstated. He was only able to suppose his assumption from working with the speculation that Marcelles was going to economize off the inventory of two of their sales departments. Other cases discussed in class have shown the subterfuge being perpetrated to have figure behind it. In the DeBurger case, there is no evidence of fraud being committed with the intent of deceit.



This case, however, does remind one of the Tommy OConnell case, in where both individuals (OConnell & DeBurger) found discrepancies throughout their audits, but waited excessively long to bring attention to the necessary individual(s) and even more neither had substantial evidence to back up their accusations.
2.
During the audit of Marcell, the inventory was the focal point of concern for the audit staff, and the crumbling financial standing of the company made the inventory more of a concern. The audit staff was aware that any material exaggeration in the inventory account would lead to the company having to sort out its first year of operating with a loss. DeBurger had access to inventory...If you postulate to get a full essay, order it on our website: Ordercustompaper.com



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