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Flash Technologies Audit Case

746 Words3 Pages

Control Risks
To evaluate the control risks associated with the 2014 Flash Technologies audit, we will look at the COSO Framework.
- Control Environment: Commitment to Competence (Employees seem to receive sufficient training and understand their responsibility in the manufacturing process. Inspection team conducts thorough investigations of product quality and exercises organization and efficiency. Employees are under the pressure to ship customer items under harsh time constraints because of Mr. Schwimez’s decision); Audit Committee Participation (Flash Technologies had indepent accountants audit their financial statements from Adams & Adams LLP. However, the company decided that these current auditors cannot provide the international support that is needed because of increased investment in other countries, such as Canada and Korea. Therefore, they contacted our team for the audit); Integrity and Ethical Values (The company has experienced strong …show more content…

For instance, if there is no separation of duties, this presents a possibility for committing fraud. As auditors we should evaluate the relevance of the controls and their efficiency. In the case of Flash Technologies, there is no developed internal control (it could be because information is not included in the case). The company has detective controls related to identifying faulty products. However, there are no neither detective nor preventive controls discussed related to the correctness of the financial information. Most of the controls that the company has are manual. Because the company does not demonstrate having strong internal controls, this makes it more susceptible to misstatements from both fraud and errors and violations in assertions. Therefore, auditors will need to do more thorough investigation of the financial statements and because of not having structured controls they might run into difficulties of getting needed

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