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There are discussion about internal controls, and the impact onorganizations. Discuss your opinions on Sarbanes/Oxley impacts onthe economy, is it effective? If so why did we have anothereconomic event in 2008? Incorporate the Financial reporting Fraudarticles into your responses.

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Trinidad Tremblay
Trinidad TremblayLv2
28 Sep 2019

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MICROSOFT CORPORATION

7372 - SERVICES-PREPACKAGED SOFTWARE

10-k report- http://www.sec.gov/Archives/edgar/data/789019/000119312513310206/0001193125-13-310206-index.htm

Using this information answer the following question:

a. Are your company's financial statements audited by an independent public accounting firm? Find and read the "Report of Independent Registered Public Accounting Firm" (or similarly titled report) in the 10-K. What is the name of your company's audit firm and what type of opinion did it issue? (unqualified, unqualified with modified wording, qualified, adverse or disclaimer). Summarize the responsibilities the auditor assumed regarding the financial statements and internal controls based on their report.

b. Find and read the "Report of Management Responsibilities" or "Certification of Chief Executive Officer/Chief Financial Officer" (or similar titled report) found in the company's 10-K. These reports are required by the Sarbanes-Oxley Act. Who signed it? Summarize the responsibilities the management assumed regarding the financial statements and internal controls based on their report

Refer to the Columbia Sportswear Annual Report in Appendix A.You will need to find and then read the following reports:

• Management’s Report on the Consolidated Financial Statements(Item 8)
• Report of Independent Registered Public Accounting Firm onConsolidated Financial Statements (Item 8)
• Management’s Report on Internal Control Over Financial Reporting(Item 9A)
• Report of Independent Registered Public Accounting Firm onInternal Control over Financial Reporting (Item 9A)

Requirements

1. Who is responsible for the information in the annual report? Whois responsible for recommending the independent accountants to theboard of directors?
2. Who were the independent auditors? Under what standards did theyconduct their audit? What was their opinion of the auditedfinancial statements?
3. Who is responsible for establishing and maintaining adequateinternal control over financial reporting? Is the effectiveness ofthe internal controls ever reviewed? Do you think that internalcontrol procedures are necessary? Why?
4. Do the auditors have any responsibility with respect to theinternal controls? What was the auditor’s opinion regarding themanagement assessment of internal con- trol effectiveness?

NOTE: Go beyond the textbook and search for articles on TheSarbanes Oxley (Section 404). Include what you’ve learned from yourresearch in your response to the above questions.

1. Explain what “internal controls” are and how they relate to the audit. What effect do internal controls have on the job of the independentauditor?Your answer should discuss the relationship between internal controls and the financial statements. In answering your questions, consider whether good internal controls contribute to the accuracy of financial statements. On the other hand, explore the possibility that financial statements can be accurate even if internal controls are poor. You may give an example of an internal control procedure.

2. Commonly misunderstood facts about a corporate audit of financial statements:

Terrible internal controls will result in a bad audit opinion.

A client that violates the law will result in a bad audit opinion.

A client that has a terrible business will result in a bad audit opinion.

In one or two sentences, explain why each of the following statements areuntrue.

Terrible internal controls will result in a bad audit opinion.

A client that violates the law will result in a bad audit opinion.

A client that has a terrible business will result in a bad audit opinion.

In addition to the textbook, you may want to take the multiple-choice quiz first. After you submit your answers I will provide you with the answer key. Then read the explanations to the answers, particularly on internal controls, to gain further insight.

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