Research Paper
Dell Company
Dell is a pioneer company and big name in the technology world, they got to the point that they design, develop manufacture, and distribute their own products without any outside source help. The story of dell started back in 1984 in round rock, Texas by the current CEO Michael dell.
In 2007 the company was pushed to announce that their financial statement were misleading and misstated, they announced that they were overstating the revenues between the years 2003-2007. At that time PWC was the independent auditor for dell. PWC gave an unqualified report on dell’s financials for the years 2003-2005 (Mergent,2007) , PWC discovered the fraud in 2006 audit after reviewing the internal auditor’s report, the report stated that the internal auditors found some errors in the company’s records. (Ricadela,2007). So after applying the integrated audit by PWC, an unqualified opinion was given for the consolidated financial statements but on the other hand, a qualified opinion was given for internal control over financial records. PWC of course refused to be held countable for or responsible for dell’s act in misstating their financials, and Baker & Hostler which is a law firm also agreed with PWC. (Edward,2006).
According to SOX act; the auditors should have some responsibility for their audit work, but the main responsibility is on dell’s management, they must confirm and be sure that the numbers in the financial statements reflects the real numbers. the founder and current CEO Michael Dell and the former CEO Kevin Rollins in addition to some of senior managers committed the fraud, basically what they did is that the company had an agreement with Intel, this agreement forced Dell to use Intel Processors exclusively in their products and in return they will have a periodic payments from Intel (Economist, 2010). Due to the high market competition; The company was having a hard time keeping their sales records up and that considered a
Dell is a pioneer company and big name in the technology world, they got to the point that they design, develop manufacture, and distribute their own products without any outside source help. The story of dell started back in 1984 in round rock, Texas by the current CEO Michael dell.
In 2007 the company was pushed to announce that their financial statement were misleading and misstated, they announced that they were overstating the revenues between the years 2003-2007. At that time PWC was the independent auditor for dell. PWC gave an unqualified report on dell’s financials for the years 2003-2005 (Mergent,2007) , PWC discovered the fraud in 2006 audit after reviewing the internal auditor’s report, the report stated that the internal auditors found some errors in the company’s records. (Ricadela,2007). So after applying the integrated audit by PWC, an unqualified opinion was given for the consolidated financial statements but on the other hand, a qualified opinion was given for internal control over financial records. PWC of course refused to be held countable for or responsible for dell’s act in misstating their financials, and Baker & Hostler which is a law firm also agreed with PWC. (Edward,2006).
According to SOX act; the auditors should have some responsibility for their audit work, but the main responsibility is on dell’s management, they must confirm and be sure that the numbers in the financial statements reflects the real numbers. the founder and current CEO Michael Dell and the former CEO Kevin Rollins in addition to some of senior managers committed the fraud, basically what they did is that the company had an agreement with Intel, this agreement forced Dell to use Intel Processors exclusively in their products and in return they will have a periodic payments from Intel (Economist, 2010). Due to the high market competition; The company was having a hard time keeping their sales records up and that considered a
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