Internal Control and Fraud

timer Asked: Jun 4th, 2018
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Question description

Primary Task Response: write 400–600 words that respond to the following questions with your thoughts, ideas, and comments. This will be the foundation for future discussions by your classmates. Be substantive and clear, and use examples to reinforce your ideas.

In March of 2015, a major accounting firm included in their audit report to their client, a manufacturer of software company, that there was a material weakness in the internal control over financial reporting with regard to the disclosure controls and procedures. The client's management issued a response stating that there was in fact a weakness and was doing what it could to remediate and address the weakness. The accounting firm did note that additional substantive test proceeds were preformed to ensure that the material weakness in the internal control environment did not have an impact on financial reporting. If the accounting firm was not able to confirm that they did not find any impact on the financial statements as it relates to the material weakness this issue with internal control over financial reporting could have been detrimental to the their client, the software company.

Explain the difference between significant deficiency and material weakness with respect to internal control. Report on a publicly held company which was found to have a significant deficiency or material weakness in its internal control reporting. Describe what occurred and any steps taken to remedy the problem. Please include references.

Tutor Answer

School: New York University




Sufficient deficiency and Material Weakness as Cited in Nanaimo City
Sufficient deficiency happens when there is a deficiency or a combination of different
deficiencies in the internal control over financial reporting and which is important enough to
bring into attention those that are responsible for the oversight and supervision of a company’s
reporting. On the other hand, a material weakness is a deficiency that happens when there is a
possible misreporting in the value of the financial statements of the company. A deficiency
usually happens in either des...

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