The internal control weaknesses at Northwest Pipe illustrate the importance of organizational structure and managerial standards from the point-of-sale to the cash receipt. Problems with sales, human resources and operations.
On July 23, 2010, Northwest Pipe Company, a $386 million steel pipe manufacturer based in Vancouver, Washington, received a letter from the Nasdaq Stock Market that the company had until November 4th to file its unfiled 2009 annual report and 2010 quarterly reports to avoid having its stock
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The Federal Reserve Board is wrapping up enforcement actions for 2008 against individuals that are alleged to have violated the law, participated in unsafe and unsound banking practices and breached fiduciary duties. The cases surrounding these enforcement actions underscore the importance of internal controls in both banking and non-banking organizations.
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The recent trouble at KV Pharmaceutical Company, a specialty drug company near St. Louis, Missouri, illustrates the high costs and risks associated with the pharmaceutical industry and the importance of internal controls.
On July 29, 2008, agents from the U.S. Food and Drug Administration (FDA), the body that regulates the pharmaceutical industry, seized $24.2 million worth of unapproved drugs from KV Pharmaceutical Company, a $578 million specialty drug maker located in Bridgeton, Missouri. Since then, the NYSE-listed company has been in turmoil with CEOs and CFOs coming and going, board members being dismissed or resigning and its auditor, KPMG, citing numerous material weaknesses in the company's internal controls.
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Internal controls over financial reporting play a critical role in management's ability to meet its objectives, effectively manage the organization and secure investor confidence. Evidence has shown that effective internal controls are not likely to exist in an environment void of managerial standards, organizational structure, sufficient accounting staffing, and financial reporting competence and authority at various levels of the organization.
