The financial statements of Starbucks are presented in Appendix A of this book, together with two reports: (1) a management report, Management's Responsibility for Financial Statements, and (2) an auditor's report, Report of Independent Auditors.

\section*{Instructions}

Using the financial statements and reports, answer these questions about Starbucks' internal controls and cash:

(a) What comments, if any, concerning the company's system of internal control are included in each report?

(b) What reference, if any, is made to internal auditors in each report?

(c) What comments, if any, are made about cash in the report of the independent auditors?

(d) What data about cash and cash equivalents are shown in the consolidated balance sheet (statement of financial condition)?

(e) What activities are identified in the consolidated statement of cash flows as being responsible for the changes in cash during 1996?

(f) How are cash equivalents defined in the Notes to Consolidated Financial Statements?