compamy is APPLE. 2 sentences recommemed for each response r to questions!!
Inspect the 10-K 1. What is the opinion of the auditors about the financial statements? The opinion might be that the financial statements are fairly presented.' The opinion might be that the financial statements are not fairly presented. 2. Who audits the financial statements? The Big4 accounting firms are (1) Deloitte, (2) Ernst & Young, (3) KPMG, and (4) PriceWaterhouseCoopers. They audit most publicly available companies. State who audits your companies 3. Most, but not all companies, evaluate their internal control over financial reporting. In the opinion of the management, does the company have good internal control? This is frequently described at Item 9A Controls and Procedures. 4. What standard does the company use to evaluate whether the internal control is satisfactory. This is frequently COSO Internal Control Integrated Framework (2013), but it might be another standard. Inspect the report on management compensation. Most of the time this is included in the proxy. It is in a form that starts DEF It might be DEF 14A, titled "Other Definitive Proxy Statements," or something similar Most companies have a Compensation Committee. How many of the members of the Compensation Committee are independent? Has the company ask for shareholder opinion on management compensation? This is a 'say-on-pay" vote. Describe a little of how the Compensation Committee makes the decision about pay. a. Do they use an outside consultant to help with the decision or is it based only on their own deliberations? If they use a consultant, who is it? b. Is there a set of peer companies that they use as a comparison? Describe how much the CEO makes. Include a breakdown of the components of the pay. Commonly, 1 2. 5. a. 6. is salary, bonus, and equity. What measures are used to evaluate management, particularly for the bonus? I hope it's not a long list of measures. If the list is long, select some representative measures. Describe the chosen measures. Is the data item drawn from the financial statements? Which financial statement, Balance Sheet, Income Statement, or Statement of Cash Flows? b. If the item is not drawn from the financialstatements, what information does it seem to capture? What does the committee have to say about whether the incentives in the compensation plan can be dysfunctiona? If the measures turn out to be wrong, or misreported, does the company have a policy of trying to recover the pay. For example, suppose the bonus depends on net income, and perhaps a year later, the company discovers that the net income was incorrectly reported. Does the company have a policy of trying to recover the pay? The tax code, Section 162(m), mostly limits deductions for management compensation to $1 million Is the company seemingly influenced by the tax code limit on deductibility, or is the company mainly concerned with compensation and not the tax deductibility? 7. 8
