December 31, 2004. Subsequently, management identified the following material weakness in internalcontrol over financial reporting with respect to accounting for hedge transactions:• a failure to ensure the correct application of SFAS 133 when certain derivative transactions wereentered 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 endedDecember 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, 2001and each of the
6quarters in 2003 and 2004. ConclusionFor 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.
7ReferencesCommittee 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:
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U.S. Securities and Exchange Commission, Committee of Sponsoring Organizations of the Treadway Commission