Ticket #1122: abc.html

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1<P>Yes</P> <P style="MARGIN: 0pt"><U><SPAN style="FONT-SIZE: 10pt; FONT-FAMILY: Arial">Significant Deficiencies:</SPAN></U></P> <P style="MARGIN: 0pt"><U><SPAN style="FONT-SIZE: 10pt; FONT-FAMILY: Arial"/></U><SPAN style="FONT-SIZE: 10pt; FONT-FAMILY: Symbol"><SPAN>·<SPAN style="FONT: 7pt &#39;Times New Roman&#39;"> </SPAN></SPAN></SPAN><SPAN style="FONT-SIZE: 10pt; FONT-FAMILY: Arial">Revenue Recognition:<SPAN> </SPAN>The company recognizes sales at the time of shipment however due to some arrangements&#44; the sales should not be recognized until receipt of the items.<SPAN> </SPAN>The company maintains risk of loss until delivery.</SPAN></P> <P style="MARGIN: 0pt"><SPAN style="FONT-SIZE: 10pt; FONT-FAMILY: Arial"><SPAN style="FONT-SIZE: 10pt; FONT-FAMILY: Symbol"><SPAN>·<SPAN style="FONT: 7pt &#39;Times New Roman&#39;"> </SPAN></SPAN></SPAN><SPAN style="FONT-SIZE: 10pt; FONT-FAMILY: Arial">53 Week Fiscal Year:<SPAN> </SPAN>The Company did not recognize $369&#44;000 of General and Administrative for the extra week.</SPAN></SPAN></P> <P style="MARGIN: 0pt"><SPAN style="FONT-SIZE: 10pt; FONT-FAMILY: Arial"><SPAN style="FONT-SIZE: 10pt; FONT-FAMILY: Symbol"><SPAN>·<SPAN style="FONT: 7pt &#39;Times New Roman&#39;"> </SPAN></SPAN></SPAN><SPAN style="FONT-SIZE: 10pt; FONT-FAMILY: Arial">Income Taxes:<SPAN> </SPAN>The Company incorrectly recorded the tax impact related to their pension obligation.<SPAN> </SPAN>The result was an adjustment to their 2007 income tax of $520&#44;000.</SPAN></SPAN></P> <P style="MARGIN: 0pt"><SPAN style="FONT-SIZE: 10pt; FONT-FAMILY: Arial"><SPAN style="FONT-SIZE: 10pt; FONT-FAMILY: Symbol"><SPAN>·<SPAN style="FONT: 7pt &#39;Times New Roman&#39;"> </SPAN></SPAN></SPAN><SPAN style="FONT-SIZE: 10pt; FONT-FAMILY: Arial">Fraud Risk Assessment:<SPAN> </SPAN>The Company has a documented fraud risk assessment process for 2007 however they did not have an effective fraud risk assessment for the full year.<SPAN> </SPAN>A formal company-wide risk assessment process of the design and operating effectiveness of fraud controls is not performed.<SPAN> </SPAN></SPAN></SPAN></P>