• Research Paper on:

    Number of Pages: 5


    Summary of the research paper:

    This 5-page paper focuses on solutions proposed by Heinz's audit committee when accounting irregularities came to light. The paper argue that the proposals were not the right way to go.

    Name of Research Paper File: AS43_MTheinzacc.rtf

    Buy This Research Paper »


    Unformatted Sample Text from the Research Paper:
    and were repaid or exchanged for services in succeeding fiscal years. Reports coming out indicated that the scope of the practice nor the amounts involved were known, though management was  fairly secure in stating that there would be no impact on Heinzs reported earnings during the time period. However, investigations demonstrated that there had been widespread use of improper billing,  accounting and reporting procedures at a variety of Heinz divisions including Heinz USA, Ore-Ida and Star-Kist, as well as the companys foreign operations. The two major of impropriety were improper  recognition of expenses (mainly use of advertising and market research expenses - with expenses recorded in one fiscal period, then services performed in a following one) and improper recognition of  sales. In this latter scenario, sales were recorded in a fiscal period other than that in which sales should have been recorded under generally accepted accounting principles (GAAP). The audit  committee involved indicated the income transferal practices were geared toward adjusting income reported by divisions, in an attempt to reach goals set by Heinzs world headquarters. Furthermore, failure to detect  the practices were attributed to Heinzs weak internal controls. Other factors included a great deal of decentralization when it came to income reporting, lack of an effective Code of Ethics  compliance procedure, lack of standardized accounting procedures for Heinz divisions, no effective review and monitoring process, lack of competent financial personnel at world headquarters and the divisions, and no world  headquarters electronic data processing manager that would be responsible for control procedures of the divisions EDP departments. As a result, the audit committee made a series of recommendations. Under the  area of strengthening accounting controls and reporting the committee suggested that the companys world finance department become stronger and more directly involved in application of GAAP in the affiliates. It 

    Back to Research Paper Results