When I was studying accounting back in the Dark Ages, the professors always emphasized the importance of internal controls. Without good internal controls, they said, you really don’t have an accounting system. So, imagine my surprise on reading in yesterday’s Wall Street Journal that 500+ public companies have poor internal controls; at least that is what these companies in effect told the SEC when reporting under the Sarbanes-Oxley Act.
Among the companies reporting deficient internal controls were McAfee, Inc. (what does that say about the security software they sell), SunTrust Banks, Inc. (is your money safe there?), Kodak and Toys “R” Us.
While some of these deficiencies are minor, some are not. For example, Kodak had problems with its income tax accounting. Terex had ‘imbalances’ in some accounts. Navistar did not have sufficient specialized accounting personnel.
Where were the company’s auditors?
2 comments:
Aren't most of them doing 'time' in the penitentiary, Al?
Hey, I changed domains and was wondering if you wouldn't mind updating the link you have for me to pressing on in the dark. Thanks so much.
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