Pacific Sunwear of CaliforniaPacific Sunwear of California

1. What are the differences between internal control deficiencies, significant deficiencies, and material weaknesses? How are they treated differently with regard to the SOX 404 opinion on ICOFR? 2. Evaluate the process PacSun used to comply with SOX Section 404. Could efficiency and effectiveness be improved? 3. Why did some Big 4 Firms consider the significant deficiency detected in year 1 for PacSun a material weakness and others, like Deloitte, consider it a significant deficiency? 4. Do you agree with Deloitte's determination that the year 2 GAAP departure also represented only a significant deficiency in controls? 5. The CFO does not believe that the costs of complying with SOX were greater than the benefits to PacSun. Why do you think he concluded this? Do you believe that the CFO considered all sides of the issue? Explain.