Question: The following questions address issues concerning internal control. Ford 10-K and Toyota 20-F a. Both Ford and Toyota management comment on the fact that internal

The following questions address issues concerning internal control.

Ford 10-K and Toyota 20-F

a. Both Ford and Toyota management comment on the fact that internal control over financial reporting has “inherent limitations.” What are those inherent limitations?

b. Locate the CEO certification toward the end of Ford’s 10K. Summarize the main components of the certification. Why should users of the financial statements be assured by the statements made in the certification?

c. How does management obtain comfort that internal control does not contain any material weaknesses?

d. From a conceptual point of view, assume two companies are the same size, participate in the same industry, and have the same reported net income. However, one has a material weakness in internal control over financial reporting and the other does not have any material weaknesses. Should the stock price of the two be different? If yes, what is the rationale for the difference in the stock price?

Step by Step Solution

★★★★★

3.52 Rating (179 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

a The inherent limitations are that while controls may be designed and monitored properly unintentional errors or intentional misstatements eg fraud m... View full answer

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Document Format (1 attachment)

330-B-A-A-B-R (976).docx

120 KBs Word File

Students Have Also Explored These Related Auditing Questions!

Comment on the fact that the reduction of pyruvate to lactate, catalyzed by lactate dehydrogenase, is strongly exergonic (recall this from Chapter 15), even though the standard free-energy change for...

The following questions address fraud risks in specific audit areas and accounts. a. Which of the following internal controls will best detect the theft of valuable items from an inventory that...

The following questions address CPA firms and entities that regulate them. Choose the best response: a. Which of the following statements accurately describes U.S. CPA firms that are not sole...

http://corporate.ford.com/doc/sr13-form-10-k.pdf http://www.toyota-global.com/investors/ir_library/sec/pdf/20-F_201403_final.pdf Using the 2014 Ford 10-K and Toyota 20-F (links above for Ford 10-K...

Ford 10-K and Toyota 20-F - 2014 a. Both Ford and Toyota management comment on the fact that internal control over financial reporting has inherent limitations. What are those inherent limitations?...

Review the Form 10-K for the company selected for team assignments Write a 1,050- to 1,400-word paper on the following: Management's Report on Internal Control Over Financial Reporting The...

http://corporate.ford.com/doc/sr13-form-10-k.pdf http://www.toyota-global.com/investors/ir_library/sec/pdf/20-F_201403_final.pdf Using the 2014 Ford 10-K and Toyota 20-F (links above for Ford 10-K...

kindly find below objectives questions that i need help with Please correct answers only 1) In a financial statement audit, the auditor A) determines whether the financial statements are stated in...

Grading Rubric Course: MT460 Unit: 7 Points: 45 _________________________________________________ Unit 7: Corporate Social Responsibility and Business Ethics Case Study Analysis Paper: Prepare a case...

plz finish the requirements of module 6-10, if u have any question, let me know Go to www .cengage.com/accounting/rittenberg for the Ford and Toyota materials. Source and Reference Ford 10-K, Toyota...

Transaction analysisvarious accounts. Prepare an answer sheet with the following column headings. For each of the following transactions or adjustments, indicate the effect of the transaction or...

Read the article "Five Minds of a Manager". Provide two to three insights you gained from the article.

3. Fill-In Questions In the year 2007 we ran a trade defi cit of $ ________________ billion. (LO2)

Describe the difference between public law and private law, including the difference between criminal law and tort law.

What kind of surprises should an audit be designed to avoid? Why is it important that the audit function operate to avoid surprises?

The fairness of financial statements and the adequacy of internal controls are judged only by reference to pre-established criteria. What serves as the criteria to judge the fairness of financial...

How does complexity affect (1) The demand for auditing services and (2) The performance of auditing services?

Solve the following questions using the data given below Stocks Mean Return Variance of Return X 2 2.25 Y 4 36 Z 6 4 Stocks Mean Return Variance of Return X 2 2.25 Y 4 36 Z 6 4 Correlations X and Y X...

Make this sheet user friendly; especially for users that see the sheet for the first time. To use this for your benefit, you may want to design it so that it can be used to calculate your interim...

ApartmentNo. 1 2 3 4 5 Size(m2) 850 1450 1085 1232 718 MonthlyRental($) 950 1600 1200 1500 950 ApartmentNo. 6 7 8 9 10 Size(m2) 1485 1136 726 700 956 MonthlyRental($) 1700 1650 935 875 1150...