Explain How a Merchandising Company Can Manipulate Earnings Through Its

question 48

Essay

Explain how a merchandising company can manipulate earnings through its year-end inventories. What can an auditor do to detect this type of manipulation?

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Definitions:

New Deal

A series of programs, public work projects, and financial reforms and regulations enacted by President Franklin D. Roosevelt in the United States during the 1930s to help recover from the Great Depression.

Franklin Roosevelt

The 32nd President of the United States, who led the country during the Great Depression and World War II, known for his New Deal policies.

Suburbanization

The process of population movement from within cities to residential areas on the outskirts, leading to the expansion of suburban areas.

Foreign Oil

Oil that is sourced from countries other than one's own, usually referring to the importation of crude oil or petroleum products.