Jack Greenberg, Inc.

Family induce fear is a business that is owned by champion family, most of the sh atomic number 18holders are from the same family. whizz of the major problems in this type of business is a conflict in interests among the familys member. The tender should be careful and retain the type of the relationship among the familys member. in that respect should be a written apprehension to specify chastens, duties, and obligations for each member, the meeter should hear those documents for further in counterfeitation.One issue that faced the attendant is to on a lower floorstand the attitude of each member, the pretend of manipulating facts sens be existed due to the button up relationship. In the case of Jack Greenberg, the male child has manipulated the numbers in the record for his dumbfounds sake and no ane would be able to prevent him since he is one of the owners. The possibility of hiding facts is superior in this kind of business beca function of the close up re lationship among the familys member.I believe the family owned business demands more effort from the take stockor to check and break dance misstatements. 2. For the prepaid stock-take I would preach that the tender should decoct on the imitateing objectives existing, occurrence, valuation and allocation, exonerateness, and right and obligation. Prepaid items represent a complete listing of the companys cost that are allocable to future periods and that can reasonably be expected to be realized through future operations.As for the merchandise, the inspector should personally observe the gunstock to keep in line the amount save, the most measurable activate of the observation of inventory is to determine whether the physical count is being taken in accordance with the customers instructions. The audit objective related to merchandise are * Existence Inventory as recorded on tags exists. * Completeness Existing inventory is counted and tagged. * true statement Inventor y is counted accurately. * Realizable value ancient and unusable inventory items are excluded or noted. Rights The node has rights to inventory recorded on tags. * Classification Inventory is classified aright on the tags. * Cutoff Transactions are recorded in the proper period. 3. essential order is created, used, and retained within the guests organization and without the help of right(prenominal) parties for example sales invoices duplicate copy, employees age storys, inventory reports, and purchase requisitions. On the an otherwise(prenominal) hand, external evidence originates outside the clients organization for example aver statement.This type of documents ecumenicly prepared in the ordinary course of business activities and form part of its records whether of accounting or non-accounting nature. sometimes obtained directly from source such as bank, debtors, and creditors confirmations. External evidence and the internally generated evidence circulated externally are more au hencetic than the internal evidence. 4. Walkthrough is simply the act of analyse a transaction through organizational records and influences, a commonsense approach to study how a process works.The purpose of walkthrough procedure is to evaluate the reliability of the clients accounting organisation. The attender looks at the supporting documentation for a transaction from its starting point and then proceeds to examine the accounting system steps thereafter until ultimate lust of the item. The walk-through examination is one of the testifys that is important for the auditor to obtain an discernment of the clients business. The U. S.Public Company Accounting direction Board (PCAOB) has drawn attention to a fundamental audit procedures, one that is so common that auditors may take it for apt(p) is the walkthrough procedure. Most auditors traditionally induce viewed walkthroughs as the procedure of choice when attempting to develop an understanding of key proc esses and internal stops of a client. Now, walkthroughs are required when certifying financial reporting controls under Section 404 of the U. S. Sarbanes-Oxley Act of 2002. As it relates to scrutinize Standard No. from the PCAOB, the standard includes a requirement that the auditor must actualize a walkthrough for each of the companys significant processes. 5. I would highly recommend that the auditor should extend the scope of all important(p) test and increase the sample size of it in order to discover other misstatements that existed. The auditor also could trace documents to rise whether the inventory has been listed accurately. Analytical procedure and test of detail as part of substantial test to find the relationship between the inventory account and other accounts in the financial statements.Cut off test with physical observation to the inventory would help to discover fraud and any misstatement in the inventory account. In addition, the auditor may use confirmation to confirm amount listed in the record with third parties. 6. I mobilise the audit firm responsibility is to predicate the client that there are weaknesses in their current internal control all the same the audit firm does not have the right to force the client to do some action regarding those deficiencies. The auditor should exertion to persuade the client and reveal the risks of having such a weak internal control system.In case the client did not aid with the auditor, the auditor should resign from performing audit services to the client he or she should disclose that decision. The general Accepted Auditing Standards -AU one hundred fifty paragraph 2- require the auditor to halt independence as a general rule, the auditor must also suffice due professional care in the performance of the audit and the preparation of the report therefore, in order to maintain the auditor independence, the auditor should have his or her own voice and not just follow the clients rule.