1. Why does Molex have to hire external auditors? The major reason for firms to hire external auditors is to help the control of conflict of interest between firm managers‚ investors and shareholders. External auditors help you determine whether companies are in compliance with all applicable Internal Revenue Service rules. Under the Sarbanes-Oxley Act‚ a public company must hire an external audit team to review their accounting procedures and their financial statements. While internal auditor checks
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president and company controller have discussed this problem and the controller has mentioned this idea that if the company changed from LIFO TO FIFO it might be possible to maintain earning growth in 2008. He prepaid a memo to president explain how inventory flow assumption work and provides per forma income statement that show for one product adopting FIFO would allow Merrimack to report higher income in 2008 than it did in 2007 but higher income taxes would have to be paid. First Objective: The first
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Kim‚ Young Jae Lee‚ Max Kirsch Date: Oct. 18‚ 2010 Re: Financial Reporting Problems at Molex‚ Inc. INTRODUCTION This report discusses Molex‚ Inc.’s conflicts with its auditor‚ Deloitte and Touche‚ over a reporting issue in 2004. The report explains the details of the firm’s issue while also addressing the intentions behind Molex’s decisions‚ Deloitte’s concerns‚ and the resolutions for the conflict. MOLEX’S PROBLEMS In mid-July 2004‚ Molex’s corporate finance group identified an
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its omission or misstatement could influence the economic decision of users taken on the basis of the financial statements." Based on this definition and the following ratios‚ we believe Molex did in fact misstate the Balance Sheet and Income Statements for the period ending in June of 2004. In September‚ prior to making these errors public information‚ Molex released its yearly financials indicating it earned $175‚950‚000 in Net Income [Exhibit 2]. This numeric includes the overstatement to
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Case: Molex 1. Molex is a global 1.84 billion dollar company that manufactures electronic components; the company is based in Chicago and is the world’s second largest manufacturer of electronic components. Although the company started as a local company‚ the vision of Molex was much greater. Molex now generates about 61 percent of its business from outside of the United States. Molex has stayed true to its set goal‚ which is to build a truly global company that is at home wherever in the world
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Financial Reporting Problems at Molex‚ Inc. (A) : . n mid-November 2004‚ Molex’s Board of Directors met to decide the future of Joe King and Diane Bullock‚ the company’s CEO and CFO respectively. Molex’s external auditors‚ Deloitte &c Touche‚ had accused both of failing to disclose an $8 million pre-tax inventory valuation error in a recent letter of representation to the auditors. In response‚ King and Bullock argued that at the time of their letter they had determined that the financial
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Financial Reporting Problem Financial Reporting Problem In every company there are challenging that must be overcome to maintain a healthy business. It is important for a corporation like Wal-Mart to be aware of their competition. The ability to study and learn from other business in the same market can drastically influence the success of an organization. It is equally important to ensure that a corporation is aware of their own strengths and weaknesses. A corporation as large as Wal-Mart
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Financial Reporting Problem Part 1 Mark R. Mitchell XACC/290 August 10‚ 2014 Jeanette Butler Financial Reporting Problem Part 1 In the light of this week’s assignment of analyzing an annual report for a publicly traded company I decided to use the company now work for which is the spinoff company from the merger of international papers Xpedx division and Unisource; the new company name is Veritiv. Veritiv’s total assets for this accounting period are $1‚215 million dollars (Morningstar
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Answers Fundamentals Level – Skills Module‚ Paper F7 (INT) Financial Reporting (International) 1 (a) December 2008 Answers Pedantic Consolidated income statement for the year ended 30 September 2008 $’000 98‚000 (72‚000) ––––––– 26‚000 (3‚000) (7‚600) (500) ––––––– 14‚900 (5‚400) ––––––– 9‚500 ––––––– Revenue (85‚000 + (42‚000 x 6/12) – 8‚000 intra-group sales) Cost of sales (w (i)) Gross profit Distribution costs (2‚000 + (2‚000 x 6/12)) Administrative expenses
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Global markets engage in an array of arenas. For Molex the challenges do not fall short. There are many advantages and disadvantages which include‚ but are not limited to: culture‚ government‚ taxes‚ lifestyle management‚ and costs. In the following paragraphs this manufacturer of electronics will be examined to review its global operations. Legality‚ culture‚ and ethics are a high priority for its success of being in the market for over 70 years. Today it holds presence in 21 countries employing
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