$11-42$ Thor Industries, Inc., Mark Schwartzhoff, Deloitte

$($LO $2,3,4,6,8)$

Refer to the Focus on Fraud feature "Thor Industries, Inc. and Mark Schwartzhoff: Fraudulent Reductions in Cost of Goods Sold Through Manipulation of Inventory Accounts."

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