Auditing Research Diamond Fraudulent Scandal Essay

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Auditing Research Diamond fraudulent scandal By Nanpeng Xie—Summary and Introduction Chen Qian—Auditing Risk Wejia Xie—Accounting Fraud Yujie Chi—Internal Control ACCT 233 Professor Mohamed Gomaa Summary You may heard about the following names: PepsiCo, Kraft, Kellogg and Diamond. Their products such as Ritz, Lay’s, Pringles and Emerald are melting in our life. How do you think about the cash flow and capital behind such empires? What is the auditing and related risks of the industry? How to preventing risks and completing the whole internal control system? The analysis of Diamond food case is mainly focus on the auditing risks, internal control methods and accounting fraud activities of the company during the last fiscal year. Evidences and reasonable analysis will be provided on the following paper. Introduction of industry Almonds, chocolate, chips and candies, which is your favorite sharing with your friends or families during watching baseball games or talk shows? The secret of snack industry is based on the pleasure of tasting and established such behavior in many years. The global snack market maintained a crazy growth even in the economic crisis. Candy distributors made 2,680 tons sales in United States last year, the export of made in China snacks was 470 million dollars and the annul import of the whole north America is 6.48 billion dollars which indicate the flourish of snack sales and also, the remarkable profit. Compare with the manufacturing (15%) and retail (20%), the average rate of snack industry is about 30 to 40%. As a mature and developing industry, the trend was controlled by the tycoons which are international and subsidiaries supported. The construction of the industry contained more possibilities of financial risks. Company background Founded in 1912, Diamond has been one of the largest nuts and associate products

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