Case study, Managerial Accounting

Assignment Help:

FOR each of the following cases, indicate why management and the auditors determined that control deficiency was a material weakness.
Case1. In our assessment of the effectiveness of internal control over financial reporting as of December 31, 2011, we identified a material weakness over the accounting for and disclosure of derivatives associated with warrant instruments primarily because we lacked technical expertise and adequate procedures to develop and document our common stock warrant analysis on the applicability of ASC 815. "Derivatives and Hedging -contracts in Entity's Own Equity " to our warrant instruments, because of the lack of technical expertise and adequate procedures to develop and document our analysis of the applicability of ASC 815, which was characterized as a material weakness with regard to accounting for warrants, management has concluded that we did not maintain effective internal control - Integrated framework.

 

Case 2. In the course of making our assessment of the effectiveness of the internal control over financial reporting, we identified a material weakness in our internal control over financial reporting. The preparation and review process for the calculation of the tax provision was inadequate, which led to errors in the computation of deferred tax assets and related income tax benefit.
Case 3. Management identified a material weakness in First Bank Company's system of internal control over financial reporting with respect to ensuring that appropriate calculation of its allowance for loan losses. Specially, during s process enhancement to the model that calculates
The allowance for loan losses, the quarterly average loss rate was not annualized due to a computational error. Control procedures in place for reviewing the quantitative model for calculating the allowance for loan losses did not identify this error in a timely manner, and, as such, the company did not have adequately designed procedures.

 


Related Discussions:- Case study

Explain the quick ratio - liquidity ratios, Quick ratio Meaning: this...

Quick ratio Meaning: this ratio establishes a relationship among quick assets and current liabilities Objective: the objective of commuting this ratio is to calculate th

#title.cost control and cos reduction., what does it mean by improving mate...

what does it mean by improving materials usage in an organization?

Concentration banking, When the customers of the company are spread over br...

When the customers of the company are spread over broad geographical areas then in place of a particular collection centre the company opens collection centres at the regional stag

POHR, #questioExercise 3-12 Computing Predetermined Overhead Rates and Job ...

#questioExercise 3-12 Computing Predetermined Overhead Rates and Job Costs [LO1, LO2, LO3, LO7] Kody Corporation uses a job-order costing system with a plantwide overhead rate base

Assigning costs and assets , Assigning Costs and Assets After identify...

Assigning Costs and Assets After identifying its value chain, a firm must assign operating activity and assets to value activities. Operating costs must be assigned to the act

Explain the modern control methods, 1. Explain the modern control methods w...

1. Explain the modern control methods with examples. 2. What are the reports produced for performance measurement? Demonstrate.

Determine the phases of product life cycle, Phases of product life cycle ...

Phases of product life cycle The life cycle of a product having of four phases viz., introduction growth maturity decline during introduction phase a product is launched into

Explain short term budgets, Explain Short term budgets Short term budge...

Explain Short term budgets Short term budgets: these budgets are generally for one or two years and are in the form of monetary terms. The consumer's good industries like su

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd