Happiness Express, Inc. Essay

The primary audit objectives that auditors hope to perform by actualizeing the clients yr-end accounts due are if the purchaser is real and confirms the balance ( public) and that the proceeding that should have been were enter right on (completeness). Since check marks go outside the firm beingness audited and ask the customers or vendors to confirm or deny amounts that the company is reporting, they also give valuation. The confirmation transition lets the auditor figure out if a client even exists and if the reform balances were recorded. The objectives for performing year-end sales cut-off tests is to ensure the transactions are recorded in the correct accounting period (timing/cutoff) and that all the recorded transactions should have been recorded and actually took place (completeness/occurrence). Mistakes or errors in theory that Coopers & Lybrand may have made in trying to confirm the bacchanal teentsy in 1995 receivable were notifying Michael Goldman that they were going to seek confirmation from riot Wee, allowing Goldman to do the follow up contact with Wow Wee when the confirmation wasnt returned, and not doing any follow-up procedures when they finally did receive a conformation from Wow Wee, which ended up being fabricated by Goldberg.I think these mistakes and errors definitely involve negligence in the dissipate of the auditor for over involving Goldberg in the process of confirming Wow Wees accounts. I also believe they were reckless because there seems to be no professional skepticism at play. Wow Wee being a toy manufacturing, not responding to their confirmation requests, and having large orders near the year end did not being enough to signal to the auditors that something suspicious is occurrence is pure recklessness. Even if it did not seem like fraud obviously relying on a faxed confirmation was over and beyond negligence. Coopers and Lybrand auditors should have affirm West Coast Liquidators receivables because they ac counted for about 13% of Happiness Espresss accounts receivable and a confirmation would have been the proper way to ensure the existence of those accounts.