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ACC_week_3_fcordero - Running head PROBLEM#2 Problem#2...

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Running head: PROBLEM #2 Problem #2 Freddy Cordero Grand Canyon University
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Internal Control Internal control is an integral component of a company’s management team and yearly reporting for accuracy. The IntriCon Corporation (2010) website informs that IntriCon is a company that designs engineers, develops and manufacturers advanced miniature and smaller products. They have been in this industry for more than 25 years and have four markets, electronics, hearing health, miniature precision medical electronics and professional audio. Formerly Selas Corporation of America/Resistance Technology Inc, IntriCon is located in Arden Hills, Minnesota. They have more than 400 people in the United States, Europe and Asia facilities (About Us, para. 1). In reviewing IntriCon’s 10-K for 2002 (30) page report there is no mention of internal controls for the company. However, in reviewing the 2003 report the controls and procedures section Item 14 there is mention that 90 days before the report was filed the CEO and CFO performed an assessment of the efficiency of the disclosure controls and procedures. According to the 2003 and 2004 report the upper management team does not anticipate for the controls in place to prevent all fraud of misstatements In addition they go on to say that a control system, “no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. For the reason that of the inherent limitations in a cost- effective control system, misstatements due to error or fraud may occur and not be detected” (U.S Securities Exchange Commission, 2003-2004).
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