............2 Analysis and Law.........................................................................................5 Conclusion/ Recommendations…………………………………….………9 Issues 1. Compute key ratios and other financial measures for Crazy Eddie during the period 1984-1987. Identify and briefly explain the red flags in Crazy Eddie’s financial statements that suggested the firm possess a higher-than-normal level of audit risk. 2. Identify specific audit procedures that might have led to the detection of the following accounting irregularities perpetrated by Crazy Eddie personnel: (a) the falsification of inventory count sheets, (b) the bogus debit memos for accounts payable, (c) the recording of transshipping transactions as retail sales, and (d) the inclusion of consigned merchandise in year-end inventory. 3. The retail consumer electronics industry was undergoing rapid and dramatic changes during 1980s. Discuss how changes in an audit client’s industry should affect audit planning decisions. Relate this discussion to Crazy Eddie. 4. Explain what is implied by the term lowballing in an audit context. How can this practice potentially affect the quality of independent audit services? 5. Assume that you were a member of Crazy Eddie audit team in 1986. You were assigned to test the client’s year year-end inventory cutoff procedures. You selected 30 invoices entered in the accounting records near year-end: 15 in the few days prior to the client’s fiscal year-end and 15 in...
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...Crazy Eddie The major schemes involved were the overstatement of inventory and the understatement of accounts payable. The overstatement of inventory was accomplished by preparing inventory count sheet for items that did not exist. In order to fix a drop in same-store sales Antar would record transshipping transactions as retail sales of individual sales. This meant that inventory would not be credited for the total number actually sold. It would inflate selected operating units in addition to overstating the entire inventory available. In addition, the company included consigned merchandise and goods being returned to suppliers in its inventory. The understatement of accounts payable was accomplished by preparing faux debit memos from vendors that were entered into the company’s accounting records. The red flags of this fraud included the tight circle of relative that ran the company, the fact that Crazy Eddie’s accountants were former employees of the external auditors, unqualified and inexperienced accounting and finance personal, intolerance to switch to an electronic inventory system, missing documentation and the continuation of impressive figures despite the leveling of the electronic boom. As for inventory the auditors should have been concerned with existence, and rights and obligations. The existence should have been tested by picking a random selection of inventory from a detailed list of the inventory stated in the financial statements. This selection of inventory...
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...I believe that Daniels is responsible for reporting the error to Peter. From the ethical reasoning perspective, I would attempt to identify the harms and benefits of whether informing my superior about potential error versus not informing them. The consequences of not reporting his mistake to Peter in projecting sales would be severe, not only for Daniels but also for entire Lynchberg Manufacturing. First, if the demand does not increase beyond the projected level later, Daniel would lose his job, and both Daniels and the company are going to involve themselves in a possible lawsuit. Besides that, regulators might investigate the failure of preparing an effective budget which probably lead to declines in net income. More important, both Daniel and the company are taking the risk of losing their reputations, which would cause the investors and creditors to lose the confidence in Lynchberg Manufacturing thus significantly affect its financing capability. Also, other stakeholders affected by his silence include employees in the accounting department who might underestimate the cost of each product, the management who might make unreasonable business decisions, suppliers who might face a dramatic sales return in raw material, and creditors who figure out the inaccurate debt repayment ratio. The primary benefit for Daniels is the acceptance from his boss and his job security in the short run. On the contrary, the consequence of reporting his mistake to Peter would cause Daniel...
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...Case Study: CRAZY EDDIE 1-6 1. Key Ratios: 1987, 1986, 1985, 1984 Liquidity Ratios: Current Ratio: 2.4062, 1.3985, 1.5626, 0.9287 Quick Ratio: 1.4044, 0.5982, 0.7680, 0.1499 Solvency Ratios: Debt to Assets Ratio 0.6837 0.6643 0.6359 0.8298 Times Interest Earned 3.6169 30.3927 28.2877 14.9253 Long-Term Debt to Equity 2.1617 1.9786 1.7462 4.8755 Activity Ratios: Accounts Receivable Turnover 32.5026, 116.7711 49.7515, 52.7208 Inventory Turnover Ratio: 4.98, 3.55, 1.89, 1.95 Looking at the key ratios during that period there were a lot of red flags. The audit risk for Crazy Eddie would be very high. Some of the major red flags were inventory turnover in 4 years went from 4.98 to 1.95. That shows that some of the accounting was incorrect. Some of the other red flags are the amount of accounts receivable. 2. a. Visit the actual store without telling them and check the inventory in place to compare with the false amounts on the inventory count sheets. b. Contact different vendors, creditors and supplies to verify they received payment from Crazy Eddie. Also confirm with the banks and creditors about the notes payable account then trace that information to the general ledger. c. Observe the recorded sales from authorized shipping and approve the customer orders and monthly statements to customers. You have to also make sure there is a separation of duties between handling the cash and reconciling the bank accounts. Therefore the same person is not doing both...
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...Crazy Eddie, Inc. Question 1 Key ratios and other financial measures: |Pro Forma Balance Sheet Ratio |1984 |1985 |1986 |1987 | | |Account Receivable |7.12% |4.18% |1.77% |3.68% | | |Merchandise Inventories |63.83% |40.51% |47.16% |36.99% | | |Account Payable |54.98% |35.22% |40.74% |16.96% | | |Accrued Expenses |16.62% |13.33% |13.49% |1.90% | | | | | | | | |Pro Forma Income Statement Ratio |1984 |1985 |1986 |1987 | | |Cost of Good Sold |77.89% |75.87% |74.11% |77.23% | | | | | | | | | |Liquidity & Activity Ratios |1984 |1985 |1986 |1987 | | |Current |0.93 |1.56 |1.40 |2.41 | ...
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...Bivariate Analysis in SPSS: The Correlation Coefficient (Textbook Resources: Norusis, pages 431-432 and 486-488) Please use the data file, Customer_Survey_Modified, for the following examples. I. An Overview of the Correlation Coefficient • measure of the co-variation or degree of association between two variables (Are two variables related to one another and, if so, what is the direction and strength of this relationship?) • can be calculated for interval and ratio variables only. II. Calculating the Correlation Coefficient in SPSS Analyze → Correlate → Bivariate • In the “Variables” box place the two variables that you are analyzing. • Select Pearson under “Correlation Coefficient” • Make sure that “flag significant correlations” is also checked. The SPSS output is in the form of a correlation matrix. The numbers in the upper right and lower left hand boxes report the results of the test of the following null and alternative hypotheses: H0: r = 0 H1: r ( 0 Where r is the correlation coefficient The values of r range from -1 to +1: • If r = 1 then there is a perfect positive relationship between X and Y. • If r = -1 then there is a perfect negative relationship between X and Y. • If r = 0 then X and Y are not related. • The sign determines the direction of the relationship while the magnitude of r determines...
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...Society written by Jerry Hannan (performed by Eddie Vedder) The song society is a melancholic song representing Chris Mccandles (Alex Supertramp) journey through his rediscovered life. The song focuses on materialism shaping your identity. The songs theme is strengthen by the fact that the song only is performed by Eddie Vedders humming voice and the strumming guitar. The ebb and flow of Vedder’s voice, paired with the decrescendos and crescendos of the wave-like guitar, reflected the tug of the wild on Alex’s life. The strumming guitar is similar to the cadenced pounding of the ocean, with its tides and undertows; its wild, mysterious grandeur. Chris flees society to find a peaceful place were he's not judged by his belongings, but by his personality. I think he was frustrated by the problems of the world and the greed of humans, as Eddie Vedder murmurs in the opening lines of Society, with the beautiful play on words, “we have agreed, with which we have a greed.” All humans have an instinctive greed, the desire for more; this is universal. How we control and channel this greed shapes our principles. The song has an interesting form. Building up through the verses leading to the catchy chorus. The verses all has four lines, but the chorus starts with two lines leading to four lines ending up with eight lines in the last chorus. As you'll notice the chorus is the only place in the song where's backing vocal humming society. I think it's represent some of Chris's thought...
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...w. wi l ey .c om/ c o l le ge / aak CASE 5-1 Barkley Foods Joyce Stevenson, the manager of marketing research for Barkley Foods, had just left an emergency meeting with the firm’s president. An opportunity to buy an established line of gourmet (high-quality/high-priced) frozen dinners had arisen. Because there were other interested buyers, a decision had to be made within three or four weeks. This decision depended on judgments about the future prospects of the gourmet frozen dinner market and whether Barkley could achieve a competitive advantage. The marketing research group was asked to provide as much useful information as possible within a 10-day period. Although uncomfortable with the time pressure involved, Joyce was pleased that marketing had finally been asked to participate in the analysis of acquisition prospects. She had pressed for such participation and now she had to deliver. Because of prior work on frozen fruit juices, Joyce had some knowledge of the gourmet frozen market. It was pioneered by Stouffer, who introduced the Lean Cuisine line of entrees in 1981. Since then, other firms have entered the industry with complete gourmet dinners (including Swanson’s Le Menu and Armour’s Dinner Classics). The distinction between entrees, dinners, and the three main types of food offered— conventional, ethnic (i.e., Benihana Restaurant Classics), or low-calorie (i.e., Weight Watchers or Light & Elegant)—define relevant submarkets. Joyce hypothesized that the gourmet...
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...To grandma Dear grandma. I write this letter to you because I am sad and you are one of the only persons I really trust and you always understand me. As you know there has always been struggles between us Catholics and the protestants, and they have never been nice to us. So now I am in a school where we are not separated, we go to classes as if we all were the same, and that is fine I think and there are no problems when we first are in the school. But the problem is; on our way to school, the protestant yell at us, call us cruel things and they even throw stones at us. This means that mom and dad need to follow us to the school and the police is there armed with shields to protect us so we don't get hit by a stone. It is very psychological hard to me, because I don't feel that I am welcome in my own city anymore. I don't know what to do, but I know that I can't handle the situation any longer. I miss you! Love Lucy. To the newspaper Enough is enough! It can't be true that we need to see our children get scars on their soul, and see them break psychological down in a age of 4 years old, just because of the protestants, they haunt our children, throws rocks at them and we have to follow them all the way up to the school. The government should do something to call of the struggles between Catholics and protestants, it has gone too far now. Me and my family are traumatized by all this, my little daughter will not go to school because she is scared, and how do you...
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...Joe Turner's Come and Gone Response Paper I think that I most relate with Bertha’s character. I like how she was always the voice of reason and gave people advice. She saw the good in people and gave everyone the benefit of the doubt. Even though Bertha’s husband Seth did not understand the other men in the boardinghouse, his wife Bertha tried to. Bertha tried to calm her husband down when he was upset. When Seth thought that the other people in the house were crazy and weird and wanted to kick them out, Bertha advised against it. I am definitely like Bertha when it comes to friends and strangers. I always try to give people a chance before I judge them. I am always there for my friends if they need me and give them advice. I especially give great advice to my female friends about men just as Bertha did with Mattie. Bertha says, “And I wouldn't waste my time fretting over Jeremy either. I seen it coming. I seen it when she first come here. She that kind of woman run off with the first man got a dollar to spend on her. Jeremy just young. He don't know what he getting into” (Act 2, Scene 3). Bertha is trying to tell Mattie that Jeremy is young and he does not know what he wants so Mattie should just leave him alone. Bertha ends up being right because when Molly comes to the boardinghouse Jeremy’s interests move to her instead. This shows just how unstable and confused Jeremy is and Bertha tries to warn Mattie but she does not listen. Mattie ends up running after Herald. I...
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...On 29th June 1936, Eddie Koiki Mabo was born in a community called Las on Mer (Murray Island) in the Torres Strait. He was originally known as Eddie Koiki Sambo but was adopted by his uncle Benny Mabo later on in his life and became Eddie Koiki Mabo. When he was 16 years old, Eddie was sent away from the island to work across Northern Queensland. He then settled in Townsville in 1962 with his new family. Yumba Meta was an association in Townsville, known for purchasing homes using government funds and Eddie was elected as a president of the association. In 1973, he established Australia’s first Black Community. Murray Island was always controlled by the Queensland Government during Eddie’s childhood but that didn’t seem to change the history of the Island or the lifestyle the Meriam people...
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...it and there was Calvin, “Aye bro. Wat up?” “Nothing much Calvin it’s pretty late wats goin on man. U bangin at ma doe like dat at this time.” “Nothin much bro just wanna let you know yo bachelor party is goin down at my crib this weekend.” “Ok fasho bro! My shit finna be turnt” “No shit Sherlock it’s gonna be at my place. Yo and I got a special guest for you.” “On me bro. Don’t tell me I wanna be surprised.” “Well you can stay down here till morning if you want” “Thanks bro.” I went back to bed but couldn’t sleep cause I was tryin to think what the special guest was. My fiancé Rosa Lee asked, ” Who was at the door babe?” “Oh it was just my bestfriend Calvin. Remember him bae.” “Ha, wat was his crazy ass talking about?’’ “Oh nothing…” “Yo lien ass.I her him talkin bout throwin some party and special guest. It just betta not be in ma house.” “Damn bae, it’s not and besides I don’t even think ima go it’s gona be a waste of my time. Why you bein all nosy anyway?” Two days later I went to go hang wit the boys and maybe have a few drinks. We all met at my house so we could get some real food made by my baby Rosa Lee. “Hey Rosa Lee just to let you know I’m stealing the bro Elias for the weekend.” “Ok Calvin that means if anything happens you are responsible. Don’t do nothing stupid.” We all go to a bar for some drinks and to shoot some pool. Eventually the boys leave and it’s just Calvin...
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...CM Punk report Phillip Jack "Phil" Brooks[1] (born October 26, 1978),[4] better known by his ring name CM Punk, is an American retiredprofessional wrestler. He is currently signed to WWE, but abruptly left the company on January 27, 2014. He is titled in the company as "the longest-reigning WWE Champion of the modern era", having held the title for 434 days from November 20, 2011 to January 27, 2013. Punk is officially recognized as the sixth-longest reigning champion of all time.[10][11] In June, after pinning WWE Champion John Cena on Raw,[138] Rey Mysterio at Capitol Punishment[139]and finally Alberto Del Rio again in a contendership match (which included Mysterio) all within one week, Punk revealed his contract would expire at Money in the Bank and vowed to leave the company with theWWE Championship; some of his speeches and mannerisms echoed his final months with Ring of Honor. After making a scathing on-air speech concerning the way in which WWE is run and its owner Vince McMahon, he was given a storyline suspension from televised WWE events[140] but was reinstated the following week on Cena's insistence.[141] Upon his return, Punk ceased to appear with the remaining members of Nexus and the group quietly dissolved that month.[142] This helped transition him from a villainous character back to being afan-favorite. Two weeks later, at Money in the Bank, CM Punk defeated John Cena to become the WWE Champion on his final night under contract with WWE.[141] ...
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...unity is the unity between Eddie and Bonita and the continual support from Netta shown in numerous ways throughout the fillm. Another example is the unity amongst Eddie and his legal team as well as the Passi brothers because without them, Eddie would not have the same confidence. Nevertheless, a lack of unity is demonstrated in his argument with Netta and the physical abuse that followed. The most important demonstration of unity is depicted through the relationship Eddie has with Netta. The pair supports each other and this is shown through the active reminders from Netta reassuring him that his battle is respectable and that she is proud of him, ultimately giving him the will to continue with his case. Without the support from Netta, Eddie May never have been able to achieve what he had, such as the connection with his family and the land claim of Murray Island. Another example includes job resignation; Netta was unhappy at first but eventually accepts it and soon shows her support. Additionally, Netta threatens to leave him at one point, but she quickly forgives him and this shows that she is a strong woman and to allow her husband to reach his full potential and achieve his dreams was a respectable move. He admits this when he confesses to Netta telling her how he "wishes he was home more" for his family. If there wasn't unity between the pair and Netta was not supportive of Mabo, the story would have been very different. The unity Eddie has with his legal team is...
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...that those injuries were the result from the act. Eddie Guerrero one time cut himself too deeply and blood came rushing out. The match was closed early and Eddie was rushed to the hospital and was given blood to save his life according to SK Wrestling. If WWE wants to be a sport than it needs to be more than just an act. In amatuer wrestling every once in awhile there is blood time outs. Where people were competing so hard that they made the other wrestler bleed. Most of the time it is a cut mouth or bleeding nose, but every once in awhile it is a broken nose. In some ways WWE is just acting to be real amatuer wrestlers. Even one time at a wrestling match I was at, one of my teammates was wrestling. The person he was against tackled his legs and his head hit my teammates mouth. They stopped the match because my teammate was bleeding. Turns out he got his front tooth knocked out. According to Justin Shaginaw, common injuries in wrestling include sprains, strains, subluxations, lacerations, fractures, concussions, skin infections, and dislocations. WIth dIslocations being responsible ten percent of all reported wrestling injuries Referring back to the definition of a sport. It also says a sport must have a set of rules or regulations. WWE barely has any regulations. There is regulations, according to the WWE Talent Wellness Policy. There is a policy on drugs, but they do not enforce them to everyone. From Hulk Hogan to Eddie Guerrero, a lot of WWE’s most popular wrestlers have...
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