Ineffective internal controls hurting GM

Struggling carmaker General Motors has
warned that ineffective internal controls over financial reporting might make it
difficult for it to execute on its business plan. 

In the filing of its 2006 results with the
Securities and Exchange Commission, GM
said weaknesses include poor ‘maintenance of records that, in reasonable detail,
accurately and fairly reflect the transactions and dispositions of the assets of
the corporation,’ as well as failing to ensure that “‘eceipts and expenditures
of the corporation are being made only in accordance with authorizations of
management and directors of the corporation.” 

GM said that its management recognized the problems and is taking steps to
correct them – but declined to comment further on the matter.

Last May, GM said that it had overstated its net income in 2001 by 35%.

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