Here is the synopsis of our sample research paper on MATTEL TOYS AND ARTHUR ANDERSEN. Have the paper e-mailed to you 24/7/365.
Essay / Research Paper Abstract
This 4-page paper discusses management assertions in connection with Mattel, financial fraud, and Arthur Andersen.
Page Count:
4 pages (~225 words per page)
File: D0_MTmattarth.rtf
Buy This Term Paper »
Unformatted sample text from the term paper:
the information management provides to another party that give a state of affairs of the financial health of the company. Typically, the "other party" is the auditor. Through management assertions,
management is "asserting" to the auditor (typically an independent person or organization that has on monetary connection with the company) that the financial statements are clean and honest.
In the following case, well examine the financial issues Mattel faced, and should have been asserted to Arthur Andersen, the companys auditor.
Identify the management assertions that would have been a concern to Arthur Anderson for the following items.
The reserve for inventory obsolescence. As part of Mattels bill and hold program, the company had understated the reserve for inventory obsolescence by several million dollars
between 1972-1972. Inventory obsolescence - in other words, how quickly an inventory becomes tired, or out of demand - is a huge problem, and in 1971 Mattels obsolescence problem was
that of Hot Wheels. Mattel disposed of approximately 5.6 million units of the product by selling them to a large oil company at a loss of $11 million.
Given, however, that sales forecasts were prepared for the disposed of Hot Wheels, a red flag should have been raised among the auditors. Furthermore,
five of the eight toys that Andersen selected for testing during the 1972 audit had had no recorded sales during the first several weeks of the new year. Three others
had negative net sales. Despite this, Andersen didnt question the companys inventory obsolescence reserve. Andersen should have dug a little deeper into the inventory obsolescence and tried to match the
...