SEC Charges Company CEO and Former CFO With Hiding Internal Controls Deficiencies and Violating Sarbanes-Oxley Requirements" describes how the SEC charged the CEO and former CFO of a Florida-based computer equipment company with misrepresenting to external auditors and the investing public the state of its internal controls over financial reporting. The company was found to have the following deficiencies. Inventory control procedures that were not designed to take into account the existing control environment, such as employees' qualifications and experience levels. Sales and warehouse personnel often failed to document their removal of items from inventory. An auditor should respond to these deficiencies by conducting a more in-depth audit of the company's internal controls over financial reporting. This may include testing the company's inventory control procedures to ensure that they are effective and that employees are following them. Reviewing the company's journal entries and other accounting records to ensure that they are accurate and complete. The auditor should also discuss the deficiencies with the company's management and board of directors and make recommendations for corrective action