· Revenue Recognition: The company recognizes sales at the time of shipment however due to some arrangements, the sales should not be recognized until receipt of the items. The company maintains risk of loss until delivery.
· 53 Week Fiscal Year: The Company did not recognize $369,000 of General and Administrative for the extra week.
· Income Taxes: The Company incorrectly recorded the tax impact related to their pension obligation. The result was an adjustment to their 2007 income tax of $520,000.
· Fraud Risk Assessment: 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. A formal company-wide risk assessment process of the design and operating effectiveness of fraud controls is not performed.