Board Members

C) The new management is becoming very assertive with the adoption new score policies and financial reporting. The management is starting to scan greater risk and adopt new revenue recognition policies. They believed the precedent years policies were too conservative and inappropriate. The new management is placing higher(prenominal) priority on terse-term performance rather than long term. The solid ground behind these major changes is due to the excessive pressure on management.Everyone in the management knows that they bemuse to show an increase in the profit of the institution, or they will also lose their jobs, just like the previous management. olibanum they atomic number 18 adopting various new accounting policies and argon concentrating heavily on the short term results. This may make the confederacy look practiced from the externally for a short term. However it is very likely that the be pool on the financial statement are non be accurate. The short term suc cess of the company does not help them internally, there are many things that the new management is changing that may not be healthy for the company.The new management also indicated that the past process of determine the accounting estimates were overly Conservative a new method of accounting estimating is being introduced. The new method of the accounting estimates will also alter the financial statements, because it will most like overstates assets and understate the liabilities. Thus achieving the short-term goals of the management. The companys accounting functions are decentralized, and the operating management does not sign score the reported results, they are reviewed by the CFO and chief executive officer before being released.The needs to be changed, the reports should be signed off by the operating management because they are closer to the operations of the company. They have the knowledge and the expertise of that part of the company, the CFO and CEO are at the top th ey may not be able to understand what the numbers on the reports mean. The operating management can read the reports more only as they are the ones who are working in that particular area, it is easier for them to assimilate errors and frauds.The employees that prepare the statements may be overstating the numbers on the reports to show that they are achieving the required performance levels. e) The organization has great controls over the segregation of employee duties. part and responsibilities are assigned in a formal, pen manner. Employees are aware of what their daily duties are and they understand their responsibilities. The company even has written job descriptions for employees and their supervisors, and these job descriptions contain specific instructions related to controls and responsibilities.The company has given significant amounts of authority to the supervisors, so they can monitor the sidereal day to day activates of the employees and make sure they are followi ng the company policies. The organization also does a good job making sure that the supervisors do not overstep their reasonable boundaries. This is done by giving disparate level employees different type of authorities. Thus the organization has successfully distributed competent amount of responsibilities to their employees and management.