Select “The Hershey Company”, and obtain a copy of the SEC Form 10-K (2014). Then write an audit report in which you answer the following questions:

a. Who are the company’s external auditors?

b. What opinion did the auditors issue?

c. Did the auditors examine all the evidence supporting the amounts and disclosures in all of the financial statements? If not, why not. Explain.

d. What is the auditor’s responsibility for the financial statements?

e. What is management’s responsibility?

f. Under the Sarbanes-Oxley Act of 2002, reports on internal control are required. Did the company’s management acknowledge its responsibility for establishing and maintaining adequate internal control over financial reporting? What is the auditor’s opinion on the effectiveness of the company’s internal controls?

g. What was their internal control system designed to do?

h. In accordance with what standards did the auditors conduct the audit?

Profitability

a. What is the net income for the year covered by the report? How does net income compare to previous years? Why did net income increase or decrease?

b. When is revenue recognized?

c. What effective income tax rate is the company experiencing?

d. How are customer coupons, discounts, and rebates treated in the financial statements?

e. Is their business seasonal?

f. How does their supply chain strategy impact the financial statements?

g. Compute the company’s profit margin ratio for 2014 and 2015 and comment on the change, if any.

Assets

a. What is the company’s largest current asset?

b. What items are classified as cash equivalents?

c. Does the company distinguish between trade vs. nontrade accounts receivables? If yes, what and how much is their nontrade accounts receivables? If no, how much is their trade accounts receivable?

d. What were the balances at year end for Allowance for Doubtful Accounts for trade accounts receivables and for nontrade accounts receivables?

e. What categories of inventory does the company report on its balance sheet? What inventory accounting method(s) does the company utilize?

f. What are the company’s depreciable assets? What method(s) of depreciation does the company use?

g. Compute the company’s Inventory turnover and Day’s sales in inventory for 2014 and 2015. Comment on the change if any.

h. What kinds of intangible assets does the company have?

i. How much goodwill is on the balance sheet and how is it defined?