Question

Create a scenario that demonstrates specific ways in which management could manipulate transactions impacting inventory values that the auditing team might not detect. Recommend key strategies that the auditor could implement in anticipation of such manipulation

Answer 1

Answer:

The office connection between a proprietor and supervisor creates a characteristic irreconcilable circumstance due to contrasts in the two gatherings' objectives and due to data asymmetry that exists between them.

That is, the chief for the most part has more data about the 'true'financial position and consequences of activities of the element than the truant proprietor does.

On the off chance that the two gatherings try to amplify their very own personal circumstance, all things considered, the chief won't act to the greatest advantage of the proprietor and may control the data gave to the proprietor in like manner.

The offers of the organization are based on explicit requests, prompting explicit buys of various sums.

Since the deals are not of standard sums, there is impressive space for control by the business associates who show up not to be directed.

The inspector ought to accordingly be wary in his examination, remembering that staff may have submitted extortion which he will disguise.

He ought to embrace a disposition of expert incredulity