Case 2.3 Happiness Express, Inc.

Case 2.3 Happiness Express, Inc. 1. By way of proveation of closing accounts receivables, listeners try for to verify management assertions regarding the Existence of said accounts receivables and its unbowed rating, AU330.12. Year-end sales cut-off test is another of import visit procedure, which gives the hearer information on the completeness of a sale. The luff is to cook sure that whatever sales are world save is recorded in the correct period. 2. Cooper & Lybrand did and so call for mistakes & errors. First, they should have never received Goldbergs pop the chief to contact Woo piss regarding the proof letter. In much(prenominal) a fiber they should have allowed Goldberg to call Woo realize exactly instead taken control of the conversation. AU330.28 makes this clear; the auditor should maintain control of the confirmation process. Secondly, after receiving the facsimile machineed confirmation they accepted it without further follow-up. AU330 .29 explains that confirmation by way of a fax should be followed up with verifying the sender and in any type requesting that the lord confirmation be sent in the mail. These mistakes by the auditor rise to the level of reckless negligence in my eyes. They in essence did not gather substantial severalise to confirm the existence or valuation of one of the companionships biggest account.

Based on the information provided on the case I cannot say the auditors actions were fraudulent because it doesnt say whether they were aware of the companies thaumaturgy or that they were in on it. 3. Cooper & Lybrand should have suddenly confirmed the receivables by West Coast Liquidators. The y made up 13% of the years end accounts rece! ivable with the majority of that make sense occurring in the last month of FY 1995. The firms indemnity and procedures manual also indicated a potential square misstatement in such cases of large year- end sales but til now West Cost Liquidators account went unchecked. In this case they go against AU330.15 regarding exercising Professional...If you want to get a wide-cut essay, rate it on our website: OrderEssay.net

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