Abstract
ABSTRACT Magnum Hunter Resources Corporation (MHRC) was an oil and gas company headquartered near Dallas, TX. Although the company grew rapidly through acquisitions, the accounting department did not keep pace with the company’s growing size and sophistication. Management identified this as an internal control deficiency (ICD) prior to issuing the 2011 financial statements but did not disclose it because management underestimated its severity. The company later disclosed multiple material weaknesses when it restated its financial statements. This case study is designed for use in the undergraduate or graduate audit classroom to examine the classification and disclosure requirements for ICDs. After completing this case study, students will be able to apply professional standards to classify ICDs; critique the decision-making process of management, consultants, and auditors tasked with evaluating ICDs; and consider the impact of material weakness disclosure on investors. JEL Classifications: M41; M42.
Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
