Memo's Essay Example | Topics and Well Written Essays - 500 words - 1

Memo's - Essay Example Fundamental Company included; Ineffective interaction between the internal audit committee and the management, which limited the independency of the company’s internal audit committee; lack of formal manuals and auditing guidelines in accordance with the GAAP with respect to operational, budgeting and financial standard which resulted into over reporting of the financial records of the company; and inadequate financial reporting and accounting systems and processes which would enhance accuracy of the reports and increase the pace of auditing. NetLogic Microsystems, Inc. is a fabless semi-conductor corporation which develops, designs, and sells integrated processors and circuits mainly used in wireless and mobile infrastructure networks. In their financial and auditing report for the accounting period dated Feb. 15, 2012, the company reported a series of limitations in the auditing exercise. As highlighted by the audit committee, auditing process indicated flaws covering from management to financial projections. The internal audit control policy of NetLogic Microsystems is highly influenced by the senior management boards, thus limiting the independence and autonomy of the internal audit body. On the other hand, the audit committee identified the following material weaknesses in the internal control of NetLogic Microsystems, Inc: first, consolidated financial statement analysis and preparation weaknesses. In the fiscal period 2011, NetLogic Microsystems, Inc did revise its net cost allocation methodology to comply with th e GAAP. However, internal auditing report revealed that the proposed methodology of allocation failed to report major program costs. This prompted the officials to reconsider and revise net cost statement to present cost valuations. Besides, it was noted that Managements Discussion and Analysis (MD&A) contained irrelevant information and therefore were incorrectly accounted for