Study the audit opinion (labeled Report of Ernst & Young LLP) of Amazon.com and the Amazon financial statements given in Appendix A at the end of this book. Answer the following questions about the company.
Requirements
1. What is the name of Amazon’s outside auditing firm (independent registered public accounting firm)? What office of this firm signed the audit report? How long after the Amazon year-end did the auditors issue their opinion?
2. Who bears primary responsibility for the financial statements? How can you tell?
3. Does it appear that the Amazon internal controls are adequate? How can you tell?
4. What standard of auditing did the outside auditors use in examining the Amazon financial statements? By what accounting standards were the statements evaluated?
5. By how much did Amazon’s cash balance (including cash equivalents) change during 2009? What were the beginning and ending cash balances?