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Auditing and Assurance Services 1st Edition by Iris Stuart
Edition 1ISBN: 978-0073404004Auditing and Assurance Services 1st Edition by Iris Stuart
Edition 1ISBN: 978-0073404004 Exercise 34
Just for Feet
Deloitte and Touche LLP was censured in April 2005 for the failed audit of Just for Feet (JFF), a Birmingham, Alabama, shoe store. JFF issued fraudulent financial statements by recognizing fictitious revenue from its vendors and by failing to write off worthless inventory. The SEC noted that Deloitte's National Risk Management Program had identified JFF as a high-risk client but had failed to perform audit procedures required for this designation.
Suggest a substantive test of balances or of transactions that could be effective in detecting the misstatement.
Deloitte and Touche LLP was censured in April 2005 for the failed audit of Just for Feet (JFF), a Birmingham, Alabama, shoe store. JFF issued fraudulent financial statements by recognizing fictitious revenue from its vendors and by failing to write off worthless inventory. The SEC noted that Deloitte's National Risk Management Program had identified JFF as a high-risk client but had failed to perform audit procedures required for this designation.
Suggest a substantive test of balances or of transactions that could be effective in detecting the misstatement.
Explanation
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Audit:
The audit is defined as a system...
Auditing and Assurance Services 1st Edition by Iris Stuart
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