Montclair State TruServ Scheme to Understate the Merchandise Payable Accrual Essay
Question Description
I’m working on a accounting report and need an explanation and answer to help me learn.
In 2003, the Securities and Exchange Commission released an Accounting and Auditing Enforcement Release (AAER) describing charges and discipline against TruServ Corporation and the companys chief financial officer. The charges claimed that TruServ underestimated the accrual for merchandise payable.
Required
Read the enclosed 2003 AAER related to TruServ Corporation. Explain the scheme that the company used to understate the accrual for merchandise payable. Finally, what audit procedures might an auditor use to uncover this misstatement?
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