Reference no: EM132611581

ACCOUNTING INFORMATION SYSTEM

You are an audit supervisor assigned to a new client, MyGres Company which is listed in Bursa Malaysia. You visited MyGres's corporate headquarters to become acquainted with key personnel and to conduct a preliminary review of the company's accounting policies, controls, and systems. During this visit, the following events occurred:

a) You met with MyGres's audit committee, which consists of the corporate controller, treasurer, financial vice president, and budget director.

b) You recognized the treasurer as a former aide to Mr Yap, who was convicted of fraud several years ago.

c) Management explained its plans to change accounting methods for depreciation from the accelerated to the straight-line method. Management implied that if your firm does not concur with this change, MyGres will employ other auditors.

d) You learned that the financial vice president manages a staff of five internal auditors.

e) You noted that all management authority seems to reside with three brothers, who serve as chief executive officer, president, and financial vice president.

Problem 1: The information you have obtained suggests potential problems relating to MyGres's internal environment. Identify the problems and solutions in relation to the internal environment concepts for each situation.