Please select a well-known company and/or a company included in the Standard and Poor’s 500 index of some of the 500 largest companies. To successfully complete this case you will need to search for your selected company’s filings at www.sec.gov and analyze the most recently filed Annual Report - Form 10 K (which for many companies will most likely be for the year ended December 31, 2018 filing date will be between January-March 2019) and the Proxy Statement – Form DEF 14A (usually filed between March - May 2019). In preparing your case please include the exact source of the information for each question. (For example – Form 10 K, Item 1, page #).
- Briefly describe the company, the location of its corporate headquarters, its business, and at least three risk factors along with their possible impact on the Company if it does not successfully manage these risks. Why would auditors want to know about their clients’ business-related risks?
- Describe The Company’s audit committee and its duties. Review the audit committee’s report and describe its primary concerns. Who is the designated financial expert on the audit committee? Does the designation as only one individual as a financial expert seem adequate for the complexity of The Company and the requirements of the Sarbanes-Oxley Act? Please explain.
- Who is the auditor for The Company? What were the fees charged for audit services for each of the last two fiscal years (2017 and 2018)? What were the type and amounts of other fees for services for each of the last two fiscal years? Do you believe the non-audit services provided by the auditor might compromise their independence, or perception of independence? Why?
- The Sarbanes-Oxley Act of 2002 requires principal executive officers of publicly traded companies to sign certain certifications in the annual report and also in the quarterly reports. Name each certification report in the annual report (hint – this might be a separate exhibit under the 10-K filing). What is the name and title of the executive officer who signed each of the certification reports? Why do you think Congress felt that it was necessary to require executive officers to sign such certifications?
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