Audit hw#3 - Homework#3 Risk Analysis Natalie Simons Laura Mickum To Paul Clikeman From Coopers Lybrand Senior Accountant Date Re MiniScribe Risk

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Homework #3 Risk Analysis Natalie Simons Laura Mickum To: Paul Clikeman Date: September 12, 2010 Re: MiniScribe Risk Assessment Paul, The overall risk of material misstatement of the financial statements for the MiniScribe Corporation 1988 audit is very high. The company’s newly appointed chairman (in 1985) has an aggressive style of management and sets high targets that he pressures his managers to achieve. Mangers are compensated and reprimanded based on their financial performance and meeting these quarterly goals. The company is decentralized and the composition of their two dozen profit centers changes often because of internal conflict. The financial staff responsible for day- to-day financial control and reporting profits is poorly trained, creating a risk for misstatement of profits. There is no internal audit department, and their audit committee meets only once a year to discuss external auditors and it does consider internal controls. The company’s internal controls are appear to be weak. For example, there is a lack of sufficient supervision at the
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This note was uploaded on 12/12/2010 for the course ACCT 307 taught by Professor Murray during the Spring '10 term at Central Texas College.

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Audit hw#3 - Homework#3 Risk Analysis Natalie Simons Laura Mickum To Paul Clikeman From Coopers Lybrand Senior Accountant Date Re MiniScribe Risk

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