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Dickinson Technologies

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Dickinson Technologies, Inc.: Lack of Internal Control Structure

This report deals with an external audit of Dickinson Technologies, Inc. Dickinson Technologies Inc. is an international manufacturer of instruments, with manufacturing operations both inside and outside of the United States. Dickinson Technologies, Inc. has a net income which has increased each year, from $3.8 million seven years ago, to a projected $15.6 million in the current fiscal year. (Agoglia, Brown and Hanno, 2003) The audit revealed that Dickinson Technologies, Inc does not have strong internal controls as required by the AICPA (AU Section 316) and Sarbanes-Oxley Act of 2002. Furthermore, the corporate culture of Dickinson Technologies, Inc. does not foster a proactive environment for safeguarding the company’s assets. Recommendations on how to handle this situation will be discussed. The lack of proactive management in implementing and sustaining internal controls is a serious matter that renders Dickinson Technologies, Inc. indefensible in protecting its assets. Employee fraud is a very serious concern in businesses today. In a recent study, statistics suggest that any given company contains employees who would be willing to commit fraud if the right situation presented itself. “Research on honesty shows that individuals fall into three groups: (1) those who will almost always be honest (approximately 30 percent of the population); (2) those who are situationally honest, who will be honest when it pays to be honest but dishonest when it pays to be dishonest (approximately 40 percent of the population); and (3) those who will always be dishonest (approximately 30 percent of the population). (Albrecht, 5 ed, pg 74.) The following documentation is intended for publicly reported companies who have to register with the Securities and Exchange Commission (SEC) as well as the accounting

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