The internal controls within Navistar are very poor since they really depend on the works of Deloitte and their knowledge around the accounting details concerning the determination of GAAP compliance. Aside from Deloitte being careless, the inner personnel of Navistar had been involving with fraud throughout many years. The books weren’t as clean as the auditors and the auditing process at the end would have favored Navistar. Having “secret” talks with suppliers about special rebates isn’t the most ethical behavior that the inner employees of Navistar could had conducted to comply with a well surrounded ethical environment between company-public. However, it didn’t make sense why Navistar would take up to five years to make the interactions with the legal body to sue Deloitte for the issues that were being held throughout this case. Perhaps Navistar was being careful to be cleared about their own unethical behavior that was occurring with their weak internal control and corporate governance. The corporate governance should have been more updated to clear any unethical situation occurring at the time to stay safe from any consequences to be held at the end. Before the SOX was implemented, many like Deloitte wouldn’t take the risks to …show more content…
In this set of Code of Professional Conduct, Deloitte should had behaved in a way better ethical manner than the unethical practices in brought into the doors of Navistar. Navistar sued Deloitte five years later for overall fraud, negligent misrepresentation, breach of fiduciary duty, and for other unethical practices. Through 2003-2005, there was some issues concerning the financial statements that belonged to Navistar brought by Deloitte. Aside from these accounting unethical ways of performing, Deloitte chose the Senior Accounting personnel for Navistar by doing the interview on applicants themselves. Then Deloitte would give their best opinion of which would be the best path within which accounting system Navistar would be better off with. All the issues would be brought to Navistar for depending so much on Deloitte’s decisions. It would be all good if the decisions constructed by Deloitte would be positive and ethical, but they turned out to be actions that would lead Navistar to sue five years later. There would be an investigation consisted of ways to obstruct what Deloitte had made all along. This would then burst out the real news which how Deloitte had been unethical all along, Navistar would show that their inner personnel would be committing fraud as well. All the deficiencies would come out into the world of