Subsequently management identified the following material weakness in internal

Subsequently management identified the following

This preview shows page 5 - 7 out of 7 pages.

December 31, 2004. Subsequently, management identified the following material weakness in internal control over financial reporting with respect to accounting for hedge transactions: • a failure to ensure the correct application of SFAS 133 when certain derivative transactions were entered into at GECC prior to August 2003 and failure to correct that error subsequently. This material weakness has caused us to amend our Annual Report on Form 10-K for the year ended December 31, 2004, in order to restate the financial statements for the years ended December 31, 2004, 2003 and 2002 and to restate financial information for the year ended December 31, 2001 and each of the
Image of page 5
6 quarters in 2003 and 2004. Conclusion For the most part, companies have done well in being flexible enough to adopt new guidelines to overcome new problems. However, the foundational principal for following the COSO guidelines is that monitoring activities must be performed with the greatest care and consistency, and this can’t be accomplished within the manual environments, such as spreadsheets, binders or even emails, that they so frequently reside in. Manual methods do not provide the visibility or standardization across the organization to allow for the proper risk monitoring. Quickly, despite your best efforts, this can leave companies open to misstatements, quickly reduce their access to data that can provide crucial insights into business decisions and even leave them exposed to financial and public relations disasters, such as fraud.
Image of page 6
7 References Committee of Sponsoring Organizations of the Treadway Commission. In 1985, COSO was formed to sponsor the National Commission on Fraudulent Financial Reporting. In 1992, COSO published Internal Control – Integrated Framework, which was updated and reissued in May 2013. Retrieved from:
Image of page 7

You've reached the end of your free preview.

Want to read all 7 pages?

  • Summer '20
  • U.S. Securities and Exchange Commission, Committee of Sponsoring Organizations of the Treadway Commission

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

Stuck? We have tutors online 24/7 who can help you get unstuck.
A+ icon
Ask Expert Tutors You can ask You can ask You can ask (will expire )
Answers in as fast as 15 minutes