Waltham Motors

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Waltham Motors Division Sharon Michaels, the division controller, is concerned regarding the performance at Waltham Motors Division for the month of May. The company lost a major customer contact during this time, and she needs the performance report analyzed. Sharon Michaels must report the information to the corporate headquarters of Marco Corporation. Waltham Motors is a subsidiary of Marco Corporation and was acquired in late 2003. This analysis is for the month of May 2004. Accounting Practices: As part of my analysis I started with a review of the company’s account policies. I found that there were no changes in the accounting procedures since Waltham had been acquired. Performance reports were created monthly by the…show more content…
In this case, it may be that they do not have any internal controls. Top level management needs to ensure these controls are created and being met. I think safeguards in financial reporting should within the company’s internal mechanisms. “Putting COSO’s Theory into Practice” explains how their framework can be used for internal audits. This will guide companies in a direction which will benefit everyone from top executives to all stakeholders. The COSO (Committee of Sponsoring Organizations of the Treadway Commission) framework consists of components such as monitoring, control activities, information & communication, risk assessment, and control environment. All of these components put together create a system that will help mitigate risks. This framework also helps with enhancing current controls to ensure the reliability of their financial statements. I believe that Waltham’s lack of internal controls has caused some of the instability in their financial reporting. For the month of May, they had no monitoring of their lost contracts and also had no mention of how many units the contract was for or if they already created the units. The report was communicated informally, and not very concise or consistent. There was no control environment to ensure consistency within this reporting. Breakeven Analysis: In April, the company lost a

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