Windy Atmawardani Rachman (21207174)
SMAK01-7
Auditing 2
1. Use EDGAR to search for Tri-Valley Corporation (TVC) and Monarch Staffing Inc. Find TVC’s 10-K and Monarch’s 10-KSB for the year ended 12-31-06.
Answer :
- Tri Valley Corporation ( 10-K )
Source : http://www.sec.gov/Archives/edgar/data/22551/000002255107000009/tvc123106-10k.htm
- Monarch Staffing Inc. ( 10-KSB )
Source : http://www.secinfo.com/d12PKm.u1p.htm#1stPage
2. Did either company report material weaknesses in ICFR? If so, what were the weaknesses?
Answer :
Yes, Tri valley Corporation report material weaknesses in ICFR, the weaknesses is reported as follow : related to controls over the accounting for complex transactions to Ensure such transactions are recorded as necessary to permit preparation of financial statements and Disclosures in accordance with generally accepted accounting principles. Such transactions included: TVC reported deficiencies “related to the control of the complex accounting for the transaction to ensure that transactions are recorded as necessary to permit preparation of financial statements and disclosure in accordance with accounting principles generally accepted.
The transaction includes:
- Proved and unproved properties
- Loans guaranteed with restricted common stock, loans secured by restricted common stock
- Deferred income taxes, deferred income taxes
- Discontinued operations from the sale of our interest in Tri-Western Resources, and Stop operation from the sale of our interest in Tri-West
- Share-based payment arrangements, “Share-based payment arrangements”
Yes, Monarch Staffing Inc. report material weaknesses in ICFR, the weaknesses is reported as follows : We did not maintain a sufficient complement of personnel with an appropriate level of accounting knowledge, experience, and training in the application of U.S. generally accepted accounting principles commensurate with our existing financial reporting requirements and the requirements we face as a public company. Accordingly, management has concluded that this control deficiency constitutes a material weakness, and that it contributed to the following material weakness. Therefore, management has concluded that this control deficiency is a material weakness, and that contributed to the following material weaknesses.
Beside that report of independent auditor also reported as follows : Our auditors have expressed an opinion that there is substantial doubt about our ability to continue as a going concern primarily because we have yet to generate sufficient working capital to support our operations and our ability to pay outstanding employment taxes. Our most recent financial statements have been prepared assuming that we will continue as a going concern. The financial statements do not include any adjustments that might result from our inability to continue as a going concern. If we are unable to continue as a going concern, investors will lose their entire investment in our Common Stock.
Source : http://www.sec.gov/Archives/edgar/data/22551/000002255107000009/tvc123106-10k.htm and http://www.secinfo.com/d12PKm.u1p.htm#1stPage
