You have been named the Chief Financial Officer (CFO) of a two year old company, SUNY Analytics. Financials have been prepared by a bookkeeper. As CFO, you responsible for the preparation of accurate financials, analysis and review of the financials before they are released and communication of the results of your company to banks, investors, creditors and the government, as necessary.

Please complete the following:

Why is it important for the CFO and his/her staff to analyze variances of budget to actual or forecasted to actual amounts, and investigate reasons for significant variances on a timely basis (whether it be monthly, quarterly and/or annually)?

The quarterly or annual analysis of variances may be useful, but to wait that long could be disastrous for the company. Why?

What are the elements of an annual report issued to shareholders; and what is required by GAAP in an annual report and what can be added by management?

Review the Tootsie Roll, Hershey or a researched annual report. What are the most important types of notes to the financials that must be included in every report, and explain.

Why are the summary of earnings and financial highlights included?

What is the purpose of a letter to shareholders?

Why is managements discussion and analysis included in the annual report?

The Securities Exchange Commission (SEC) requires the Chief Financial Officer and the Chief Executive Officer of a publicly traded company to formally sign off on the annual report under the provisions of the Sarbanes-Oxley Act. Why?

What events necessitated the passage the Sarbanes-Oxley Act?