Accumyn audited the internal control policies of an independent refiner and marketer of petroleum products (the “Company”), operating several refineries in the United States, to determine if its senior management breached the Company’s policy on extending credit.   The Company’s senior management, pursuant to internal control policies and procedures, extended credit to a wholesale customer on an open account basis based on letters of credit the customer provided as collateral and statements made by the Company’s external auditors.

After analyzing the roles and responsibilities of the Company’s management and its external auditors in accordance with generally accepted auditing standards and the Sarbanes-Oxley Act of 2002, Accumyn determined that it was not the role of the Company’s external auditors to determine the credit limit for customers, but the role of the Company’s management, who as a result of failing to adhere to its own internal controls, caused the Company to sustain a significant loss from bad debt.   Accumyn ultimately determined that the letters of credit were not valid; were issued several years after the customer’s credit balance had already exceeded the Company’s internal credit limit and the authority of its senior management; and that the Company’s senior management failed to follow its own internal control policies and procedures as it related to verifying customer collateral.