Question: Refer to the Professional Judgment in Context feature Thor Industries, Inc. and Mark Schwartzhoff: Fraudulent Reductions in Cost of Goods Sold Through Manipulation of Inventory

Refer to the Professional Judgment in Context feature "Thor Industries, Inc. and Mark Schwartzhoff: Fraudulent Reductions in Cost of Goods Sold Through Manipulation of Inventory Accounts." Answer the following questions.
a. List the incentives and opportunities that enabled Schwartzhoff to commit the fraud. Speculate on his possible rationalizations.
b. What do the control deficiencies imply about the approach Deloitte should have used to audit the inventory-related accounts and assertions on the Thor and Dutchmen audits? Discuss your answer in terms of the relative mix of evidence in the form of tests of details, substantive analytics, and tests of controls. Why might Deloitte auditors have lacked professional skepticism regarding the financial results of Dutchmen?
c. What substantive audit procedures (both tests of details and analytical procedures) could have detected this type of fraud earlier?

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