Let’s resume our examination of Dick’s Sporting Goods (Dick’s). Return to Dick’s Annual Report (see the Continuing Financial Statement Analysis Problem in Chapter 2 for instructions on how to access the Annual Report). Now answer the following questions:

1. Look at Dick’s latest audit opinion. It can be found on page 39 in Dick’s 2016 annual report. Which CPA firm audits Dick’s? Is their audit opinion unqualified, qualified, adverse, or a disclaimer?

2. What does the auditor’s opinion say about the accounting standards used by Dick’s? What does the opinion say about how the audit was conducted? What does the audit opinion say about Dick’s internal control?

3. Look at management’s report on internal control, found on page 33 in Dick’s annual report. Look at the auditor’s statement on internal control, found on page 34. What do these statements tell you?

4. Look at Dick’s balance sheet as of January 28, 2017. Do Dick’s financial statements reflect current or historical values? What is the value of stockholders’ equity reported on the latest balance sheet? On the same date as the latest financial statements (January 28, 2017), Dick’s stock sold for $52.17 per share, for a total market value of over $5.5 billion. Why is there a difference?

5. Look over Dick’s financial statements and footnotes. Review your answers to questions 1 through 4 above. Do you think Dick’s financial statements are understandable, relevant, and reliable?