Phar-Mor Inc.

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Bobbie H


Date added:

May 16, 2014








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Coopers & Lybrand won the Phar-Mor, Inc. account with a very low bid, so they wanted to limit their costs by testing only 4 out of the 129 stores. Phar-Mor made false entries to the inventory records to cover up money embezzled by management and they did this by monitoring the auditors’ test count procedures and found out which 4 stores were being tested in advance...
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This gave them the opportunity to stock up chosen stores with inventories from other locations and adjusted the books accordingly. 4. Some audit procedures that can detect overstatement of inventory: • Pay attention to the management assertion that inventory quantities exist. • Review their inventory counting procedures...
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