Spongetech Delivery Systems, Inc. (fka SPNGQ)

[Christy from Google]

The Audit Committee is a form of INTERNAL CONTROL, but not in a tradional sense of accounting controls. I believe a "internal control" problem was clearly addressed in the Wells Notice.

The ARA (Audit Risk Alerts, I think) pinpoints this exact problem. Ineffective Audit Committees that are not independent and have no financial expert. IMO the primary reason for D&T resigning. Mosky promised corrective action, but nothing happened.

In addition, I believe (JMO) the investigators considered RME and SPNG as one entity and the internal controls were lacking for intercompany transactions. This would be my approach in addressing the various investigation issues.