Dickinson Technologies
Question 1. Assessing the Fraud Risk Factors: High Risk factors and Low Risk Factors.
High Risk Factors:
1. Management’s attitude towards overriding controls: Section 5, under topic Integrity and ethical values, of the questionnaire suggests that override could occur without management’s approval, manager’s override is not explicitly prohibited and no interventions by the management were observed.
2. The Degree of oversight related to the company’s control structure exercised by the management: Section 4, under topic Assignment of Authority and responsibility, of the questionnaire suggests that the Supervisors have broad levels of authority and the responsibility of day-to-day decisions lies on the shoulders of the supervisors and on tope of that the senior management does not exercise significant oversight on such decisions and activities.
3. The controls related to safeguarding the assets: Section 3, under topic Management’s Philosophy and Operating Style, of the questionnaire suggests that control system to protect valuable assets exists, but, number of examples of failure to adhere to the system or lack of appropriate management oversight were observed.
4. The segregation of duties, particularly in key functions: in many sections of the questionnaire it is clearly stated that there is no clear segregation of duties. Many tasks are overseen by the supervisor’s only. In Section 6, under topic organizational structure, it is stated that some examples of supervisors fulfilling the dual responsibilities were observed.
Low Risk Factors:
1. Management’s accounting policy choices and financial reporting practices: Section 1, 3 and 5, under topic Management’s philosophy and Operating Style, suggests that management follows conservative approach in its accounting policies and financial reporting practices. Also, all financial reports are reviewed and approved by the controller, CFO and CEO before release and unit accounting personnel report to central
High Risk Factors:
1. Management’s attitude towards overriding controls: Section 5, under topic Integrity and ethical values, of the questionnaire suggests that override could occur without management’s approval, manager’s override is not explicitly prohibited and no interventions by the management were observed.
2. The Degree of oversight related to the company’s control structure exercised by the management: Section 4, under topic Assignment of Authority and responsibility, of the questionnaire suggests that the Supervisors have broad levels of authority and the responsibility of day-to-day decisions lies on the shoulders of the supervisors and on tope of that the senior management does not exercise significant oversight on such decisions and activities.
3. The controls related to safeguarding the assets: Section 3, under topic Management’s Philosophy and Operating Style, of the questionnaire suggests that control system to protect valuable assets exists, but, number of examples of failure to adhere to the system or lack of appropriate management oversight were observed.
4. The segregation of duties, particularly in key functions: in many sections of the questionnaire it is clearly stated that there is no clear segregation of duties. Many tasks are overseen by the supervisor’s only. In Section 6, under topic organizational structure, it is stated that some examples of supervisors fulfilling the dual responsibilities were observed.
Low Risk Factors:
1. Management’s accounting policy choices and financial reporting practices: Section 1, 3 and 5, under topic Management’s philosophy and Operating Style, suggests that management follows conservative approach in its accounting policies and financial reporting practices. Also, all financial reports are reviewed and approved by the controller, CFO and CEO before release and unit accounting personnel report to central