Review the Form 10-K for the company selected for team assignments. Write a 1,05
ID: 2578554 • Letter: R
Question
Review the Form 10-K for the company selected for team assignments. Write a 1,050- to 1,400-word paper on the following: Management's Report on Internal Control Over Financial Reporting The Independent Registered Public Accounting Firm's Report on Internal Control Over Financial Reporting The Independent Registered Public Accounting Firm's Report on the Financial Statements Explain the purpose and content of each of these reports. Assuming the report you review is an Unqualified Opinion, express your thoughts on other types of financial statement reports such as Qualified Opinions, Adverse Opinions, and Disclaimer of Opinions.****Company is Coca-Cola. Form 10-K Link http://www.coca-colacompany.com/investors/annual-other-reports
Explanation / Answer
A Form 10-K is an annual report required by the U.S. Securities and Exchange Commission (SEC) that gives a detailed breakdown of a company's financial performance.
The audit opinion in this case on Coca Cole Company is “Unqualified”
The reports:
Preamble
To gain and ensure the trust of the people who read these reports, those with whom the company currently does business and also for other stakeholders, the company publishes a variety of reports annually regarding their performance in various aspects of the business, not just financial performance. These reports reflect, amongst other things, the performance and accomplishments in the areas of product safety, quality and integrity, marketing and innovation, community support, workplace rights and protecting the environment.
COCA COLA COMPANY
Management's Report on Internal Control over Financial Reporting
Management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting as such term is defined in Rule 13a-15(f) under the Securities Exchange Act of 1934, as amended ("Exchange Act"). Management assessed the effectiveness of the Company's internal control over financial reporting as of December 31, 2016. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (2013 Framework) ("COSO") in Internal Control — Integrated Framework. Based on this assessment,
management believes that the Company maintained effective internal control over financial reporting as of December 31, 2016.
The Company's independent auditors, Ernst &Young LLP, a registered public accounting firm, are appointed by the Audit Committee of the Company's Board of Directors, subject to ratification by our Company's shareowners. Ernst &Young LLP has audited and reported on the consolidated financial statements of The Coca-Cola Company and subsidiaries and the Company's internal control over financial reporting.
The reports of the independent auditors are contained in this annual report.
Report of Independent Registered Public Accounting Firm to the Board of Directors and Shareowners of The Coca-Cola Company
We have audited the accompanying consolidated balance sheets of The Coca-Cola Company and subsidiaries as of December 31, 2016and 2015, and the related consolidated statements of income, comprehensive income, shareowners' equity,
and cash flows for each of the three years in the period ended December 31, 2016.
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on
our audits We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. .An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly , in all material respects, the consolidated financial position of The Coca-Cola Company and subsidiaries at December 31, 2016 and 2015 , and the consolidated results of their operations and their cash flows for each of the three years in the period ended
December 31, 2016 , in conformity with U.S. generally accepted accounting principles. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), The Coca-Cola Company and subsidiaries' internal control over financial reporting as of December 31, 2016 , based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 Framework) and our report dated February 24, 2017 expressed an unqualified opinion there Report of Independent Registered Public Accounting Firm on Internal Control Over Financial Reporting Board of Directors and Shareowners The Coca-Cola Company
We have audited The Coca-Cola Company and subsidiaries' internal control over financial reporting as of December 31, 2016 based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 Framework) (the COSO criteria).
The Coca-Cola Company and subsidiaries' management is responsible for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management's Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company's internal control over financial reporting based on our audit.
We conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal
control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances.
We believe that our audit provides a reasonable basis for our opinion.
A company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.
A company's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.
Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
In our opinion, The Coca-Cola Company and subsidiaries maintained, in all material respects, effective internal control over financial reporting as of December 31, 2016, based on the COSO criteria.
We also have audited, in accordance with the standards of the Public Company
Accounting Oversight Board (United States), the consolidated balance sheets of
The Coca-Cola Company and subsidiaries as of December 31, 2016 and 2015, and the related consolidated statements of income, comprehensive income, shareowners' equity, and cash flows for each of the three years in the period ended December 31, 2016, and our report dated February 24, 2017 expressed an unqualified opinion thereon.
Example of a Qualified Report
An "except for" opinion relates to a limitation placed on the scope of the audit.
For example, the auditor was not able to observe and test inventory, but was able to audit everything else and found that everything else conformed to GAAP. The auditor would issue and opinion that except for inventory the financial statements are fairly stated.
Example of Adverse Report
“We could not obtain sufficient and appropriate audit evidence in the course of our audit and therefore an adverse opinion is expressed.
Basis for Adverse Opinion
1. As disclosed in Note XX to the financial statements, the accounting records of the Company and its subsidiary companies were destroyed by the previous management. The current management attempted to reconstruct the Company’s accounting records based on information and documents available to them and also based on the best estimates made by the directors, in situations that such estimates are required to be made. The Company’s financial statements produced using this basis has been provided to us for audit. However, the current management is unable to reconstruct the accounting records of its subsidiary companies. As a result, no consolidated financial statements have been prepared and this is not in compliance with FRS 127 Consolidated Financial Statements which requires the Company as a parent entity to prepare consolidated financial statements.”
Example of Disclaimer of Opinion
This is because of the significance of the matters described in the “Basis for Disclaimer of Opinion paragraph”, the auditor has not been able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion; and, accordingly, the auditor does not express an opinion on the financial statements.
“We did not observe the taking of the physical inventory as of December 31, 19x4 or 19x3, since those dates were prior to our appointment as auditors for the company, and we were unable to satisfy ourselves regarding inventory quantities by means of other auditing procedures. the December 31, 19x4 and 19x3 inventory amounts enter into the determination of net income and cash flows for the year ended December 31, 19x4.
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