How many has ge done?
Financial Reporting “Red Flags” and Key Risk Factors
Complex business arrangements not well understood and appearing to serve little practical purpose. TRUE
Large last-minute transactions that result in significant revenues in quarterly or annual reports. TRUE
Changes in auditors over accounting or auditing disagreements (i.e., the new auditors agree with manage and the old auditors do not).--- OH HELL YEAH
Overly optimistic news releases or shareholder communications, with the CEO acting as an evangelist to convince investors of future potential growth. --- TRUE
Financial results that seem “too good to be true” or significantly better than competitors - without substantive differences in operations. ---- TRUE JUST READ THE PRESENTATIONS. MHR IS THE BEST IN EVERYTHING?
Widely dispersed business locations with decentralized management and a poor internal reporting system. TRUE
Apparent inconsistencies between the facts underlying the financial statements and Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A) and theperf President’s letter (e.g., the MD&A and letter present a “rosier” picture than the financial statements warrant). --- U KNOW IT
Insistence by the CEO or CFO that he/she be present at all meetings between the audit committee and internal or external auditors. UNKNOWN
A consistently close or exact match between reported results and planned results – for example, results that are always exactly on budget, or managers who always achieve 100 percent of bonus opportunities. - PERFECT EXIT RATES EVERY YEA
Hesitancy, evasiveness, and/or lack of specifies from management or auditors regarding questions about the financial statements Frequent instances of differences in views between management and external auditors
A pattern of shipping most of the month’s or quarter’s sales in the last week or last day. - TRUE
Internal audit operating under scope restriction True