Nashwa Credits—Nefret created 28 fictitious credit memos totaling $363,000
from Nashwa Distribution, the main supplier of health and beauty aids to Nefret.
Nefret’s controller initially told the auditor that the credits were for returned goods,
Then said they were a volume discount, and finally stated that they were a payment
So that Nefret would continue to use Nashwa as a supplier. However, an Abdul&
El-Emir staff auditor noticed the amount and concluded that a $257,000 payment
To retain Nefret’s business was too large to make economic sense.
The credit memos indicated that the credits were for damaged merchandise,
Volume rebates, and advertising allowances. The audit firm requested a confirmation
Of the credits. In response, Ramses Abdullah, the president of Nefret Stores, placed
a call to Saria Wasir, the president of Nashwa, and handed the phone to the staff
auditor as Wasir, orally confirmed the credits. Nefret refused to allow Abdul &
El-Emir to obtain written confirmation supporting the credits. Although the
Staff auditor doubed the validity of the credits, the audit partner, Mufti Hussein,
Accepted the credits based on the credit memoranda, telephone confirmation of the
Credits, and oral representation of Nefret officers.
Nashwa Credits—Nefret created 28 fictitious credit memos totaling $363,000from Nashwa Distribution, the main supplier of health and beauty aids to Nefret.Nefret’s controller initially told the auditor that the credits were for returned goods,Then said they were a volume discount, and finally stated that they were a paymentSo that Nefret would continue to use Nashwa as a supplier. However, an Abdul&El-Emir staff auditor noticed the amount and concluded that a $257,000 paymentTo retain Nefret’s business was too large to make economic sense.The credit memos indicated that the credits were for damaged merchandise,Volume rebates, and advertising allowances. The audit firm requested a confirmationOf the credits. In response, Ramses Abdullah, the president of Nefret Stores, placeda call to Saria Wasir, the president of Nashwa, and handed the phone to the staffauditor as Wasir, orally confirmed the credits. Nefret refused to allow Abdul &El-Emir to obtain written confirmation supporting the credits. Although theStaff auditor doubed the validity of the credits, the audit partner, Mufti Hussein,Accepted the credits based on the credit memoranda, telephone confirmation of theCredits, and oral representation of Nefret officers.
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Nashwa Credits—Nefret created 28 fictitious credit memos totaling $363,000
from Nashwa Distribution, the main supplier of health and beauty aids to Nefret.
Nefret’s controller initially told the auditor that the credits were for returned goods,
Then said they were a volume discount, and finally stated that they were a payment
So that Nefret would continue to use Nashwa as a supplier. However, an Abdul&
El-Emir staff auditor noticed the amount and concluded that a $257,000 payment
To retain Nefret’s business was too large to make economic sense.
The credit memos indicated that the credits were for damaged merchandise,
Volume rebates, and advertising allowances. The audit firm requested a confirmation
Of the credits. In response, Ramses Abdullah, the president of Nefret Stores, placed
a call to Saria Wasir, the president of Nashwa, and handed the phone to the staff
auditor as Wasir, orally confirmed the credits. Nefret refused to allow Abdul &
El-Emir to obtain written confirmation supporting the credits. Although the
Staff auditor doubed the validity of the credits, the audit partner, Mufti Hussein,
Accepted the credits based on the credit memoranda, telephone confirmation of the
Credits, and oral representation of Nefret officers.
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