25) MicroSoft's Operations and Financial results are subject

to various risks and uncertainties. Name five of the risks.

There are 21 of these risks listed in the annual report, just select five.

26) Name five characteristics of MicroSoft Corporation that could be adversely affected by various risks and uncertainties.

27) What are the three areas of execution where Microsoft must

have strong performance to succeed in the cloud based computing model?

28) Security vulnerabilities in MicroSoft's products and services could lead to reduced revenues or to liability claims. What six areas does MicroSoft deploy resources to address security vulnerabilities?

29) What economic conditions will result in lower information technology spending?

30) What impact will a decline in consumer or business spending for PCs, servers, and other computing devices have on MicroSoft's revenues?

31) What risks impact MicroSoft's investment portfolio consisting of various holdings, types, and maturities?

32) Make a time series graph of MicroSoft's stock price over three calendar years (2008, 2009, 2010). Use yahoo finance web site for historical daily stock price data, so that's three years worth, about 750 data pieces.

These questions (33 - 41) are from the Management Discussion and Analysis section of the Annual Report

33) How does MicroSoft generate revenue?

34) When, what quarter of fiscal year, have revenues generally been the highest? What are the economic reasons for this trend?

35) Compare trends in company revenues, net income, cash flow from operations over 2008, 2009, and 2010. Relate the movement of these numbers to the discussion in the 'Global MacroEconomic Factors' section of the 'overview and outlook' section of the MD&A. What are the economic reasons for these trends in these numbers?

36) What is the foundation of MicroSoft's long term growth plan?

What does MicroSoft plan to invest in currently and in the future?

What does MicroSoft develop to achieve answers in previous two questions in #36?

37) List a few other areas of investment in (R&D) Research & Development. state MicroSoft's R&D investment philosophy.

38) Define Deferred Revenues.

See cash flow from operations statement for each year, 2008, 2009, 2010,

characterize the changes in unearned revenues in both terms, deferrals and recognition, what does the net number trend as?

39) Specifically from the 'financial condition' section, what is the interest coverage ratio, first how is it computed and second what is the ratio as a number? What did the accounting text book call this number? How did the text book compute this number?

40) List the 8 areas of application of critical accounting policies.

41) How are contractual obligations funded?

42) Read statement of management's responsibility for financial statements.

a. what is management responsible for?

b. what is the answer to a. based on?

The documents are prepared based on? what

c. how does management provide reasonable assurance at reasonable cost that assets are safe guarded against loss from unauthorized use or disposition, and that the financial records are reliable for preparing financial statements and maintaining accountability for assets?

d. what does an independent registered public accounting firm do?

e. what are the job titles of the company officers who sign this statement?

On pdf page 84 there is a report of the independent registered public accounting firm to the Board of Directors and Stockholders of Microsoft Corporation dated July 30, 2010.

43) What are the main four financial statements that are audited?

44) What is the goal of the audit? (to provide a reasonable assurance of what?) How is the audit conducted?

45) What is the conclusion of the audit?

On pdf page 86 there is a second report of the independent registered public accounting firm to the Board of Directors and Stockholders of Microsoft Corporation dated July 30, 2010.

46) What is being audited?

47) What is the goal of this audit?

48) What is a company's internal control over financial reporting is a process designed to accomplish?

49) What is Deloitte's opinion regarding MicroSoft's internal control over financial reporting?

2:03 MSFTFiscal2009_filed2010_0001193... ... 84 of 137 Table of Contents PART II Item 8 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Stockholders of Microsoft Corporation: We have audited the accompanying consolidated balance sheets of Microsoft Corporation and subsidiaries (the "Company") as of June 30, 2010 and 2009, and the related consolidated statements of income, cash flows, and stockholders' equity for each of the three years in the period ended June 30, 2010. 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, such consolidated financial statements present fairly, in all material respects, the financial position of Microsoft Corporation and subsidiaries as of June 30, 2010 and 2009, and the results of their operations and their cash flows for each of the three years in the period ended June 30, 2010, in conformity with accounting principles generally accepted in the United States of America. We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the Company's internal control over financial reporting as of June 30, 2010, based on the criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated July 30, 2010, expressed an unqualified opinion on the Company's internal control over financial reporting. /s/ DELOITTE & TOUCHE LLP Seattle, Washington July 30, 2010 84 Table of Contents PART II Item 9. 9A ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL2:03 MSFTFiscal2009_filed2010_0001193... ... 86 of 137 Table of Contents PART II Item 9A REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Stockholders of Microsoft Corporation: We have audited the internal control over financial reporting of Microsoft Corporation and subsidiaries (the "Company") as of June 30, 2010, based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. The Company's 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 Report of Management 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 by, or under the supervision of, the company's principal executive and principal financial officers, or persons performing similar functions, and effected by the company's board of directors, management, and other personnel 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 inancial 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 the inherent limitations of internal control over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may not be prevented or detected on a timely basis. Also, projections of any evaluation of the effectiveness of the internal control over financial reporting to future periods are subject to the risk that the 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 Company maintained, in all material respects, effective internal control over financial reporting as of June 30, 2010, based on the criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated financial statements as of and for the year ended June 30, 2010, of the Company and our report dated July 30, 2010, expressed an unqualified opinion on those financial statements. /s/ DELOITTE & TOUCHE LLP Seattle, Washington July 30, 2010 86 Table of Contents PART II, III Item 98, 10, 11, 12, 13, 14