Case 1.

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3. As Crazy Eddie went public in 1984, Antar realized that Crazy
Eddie posted an overstatement in operating results to maintain
upward trend in the stock price. when SEC investigation occurred, it
revealed that Antar ordered a subordinate to overstate inventory
that led to overstatement in gross profit. In the following year, Antar
ordered, again, year-end inventory to be overstated and account
payable to be understated. As of 1980s, the company popularity
becomes faded. As many competitors in the market, the company
becomes more difficult to make things done also to maintain the
business. The auditor should know the condition of the market and
look onto the financial statement with skepticism manner.