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Hrm 531 Week 4 Risk Management Paper

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Because of the high value of inventory, theft of inventory is the favorite target of employees. The embezzlement could occur in Dell Inc. Therefore, further investigation such as physical account of inventory and tracing or vouching method should be developed in inventory account. Furthermore, based on the SEC 2010 report, SEC charged Dell’s Chairman and CEO, former CEO and Former CFO $100 million with fraudulent behavior. And recent SEC compliant reports represent that illegal insider trades exist in Dell. Our audit team would concentrate more on the off-balance sheet information. 6.3 Identify Related Parties Dell Inc. Corporate governance policy requires that the CEO and CFO must sign certain representations regarding annual and quarterly reports and reviewed by audit committee. Since we rely on Dell Inc.’s inventory control after assess the internal control risk, we can assume that there is no misstatement or fraud with related parties’ transactions. …show more content…
In this stage, our auditors will use their experiences and professional acknowledge to expect what the account balance should be by using vertical and horizontal analyses of comparing current-year account balance to prior-year. Therefore, we will start with Dell Inc. prior fiscal year 2012 and calculate year-to-year changes in balance sheet and income statement account of fiscal year 2013(horizontal analysis). Then calculate the percentage of every account to total account, such as total inventory for balance sheet accounts (vertical analysis).Once the analysis finished, they are compared to the expectations by auditors and evaluated the relationships between current-year and prior year balances. And if there is any significant difference, we will gather more evidence to investigate and plan additional audit work. Appendix C documents these analysis and calculations in

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