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of MultiValores who took interests in LTD. The combination with
MultiValores in 1987 brought changes in the financial and
operating controls of LTD and the Inver Group. Additionally,
during 1988, promoters in Mexico began working with "district
offices", which were consulting entities that served as
intermediaries between LTD and LTD’s clients.
K. Accounting Firm Audit
LTD and INC engaged the services of the accounting firm of
Deloitte Haskins & Sells (Deloitte) in 1984. For each taxable
year ended June 30, 1984 through 1989, Deloitte performed a
separate audit of each company and a consolidated audit of LTD
and subsidiaries.
L. LTD's Receipts
LTD's receipts during the years in issue fall into four
basic categories: (1) Management fees, (2) interest income, (3)
currency transactions, and (4) sales commissions and fees. The
total amounts of "gross receipts" and "direct costs" for each
category are discussed below.
1. Management Fees
LTD charged its clients for management of their assets in
accordance with a "Schedule" or "Exhibit" attached to the
discretionary authorization. By signing the power of attorney,
each client authorized LTD to perform the following acts: (1)
"To issue orders and directions to any bank or trust company for
accounts held in name of the Client with respect to the
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