Audit Risk Analysis of the Coca-Cola Company

Topics: Balance sheet, Generally Accepted Accounting Principles, Asset Pages: 17 (4906 words) Published: August 25, 2013
Audit Risk Analysis Project
The Coca-Cola Company
Kimberly Williams
Liberty University

MEMORANDUM
To:
From:Kimberly M. Williams, CFE
Subject:Audit Risk Analysis of The Coca-Cola Company
Date:August 14, 2011

I have carefully used information derived from the company and the Securities and Exchange Commission (SEC) to assess the risk of accepting The Coca-Cola Company as an audit client. My research was based on careful analysis of recent developments and key items including recent financial statements and business ratios.

The financial condition of the company included a comparison of the financial ratios of The Coca-Cola Company against the industry. This analysis was designed to provide a framework for assurance in the performance of an audit.

The risk assessment included an analytical identification of areas of concern. Finally, having identified and assessed risk, my recommendation is that we accept The Coca-Cola Company as an audit client.

Enclosure: Supporting documentation.

There are four major reasons that we will consider in our decision on whether to accept The Coca Cola Company to be our client. Management Integrity
Based upon assertions of management ranging from the existence of an element in the financial statements to disclosures of information regarding that element, we examine The Coca Cola Company financial statements. Relationships with Other Professionals

We will follow the GAAS requirement to communicate with the predecessor auditor prior to committing to provide audit services to The Coca Cola Company. Matters of interest include the opinions issued by the predecessor auditor, resignation of the prior auditor or the refusal to stand for reelection, disagreements between the prior auditor and management regarding accounting principles or auditing procedures and any "opinion shopping" issues. Inquiry of other professionals having dealings with the client should; however, not be limited to the predecessor auditors. Furthermore, we will ask bankers, lawyers, and other professionals can provide important valuable information about The Coca Cola Company and its management. Risk of Association

The Coca Cola Company engaged in legitimate business activities that do not violate the laws of the jurisdiction where the company is headquartered or carries on its business. After reviewing its financial statement, we believed that its financial position is stabile and liquid. Technical Competence

The auditors who will perform the auditing will be well trained due to the complexities of the modern business world. And also, the auditors must have the necessary technical competence to perform the required work or risk potential liability or damage to reputation. Company Profile

The Coca-Cola Company (Symbol: KO) was incorporated in September 1919 under the laws of the State of Delaware and succeeded to the business of a Georgia corporation with the same name that had been organized in 1892. The Company is the manufacturer, distributor and marketer of nonalcoholic beverage concentrates and syrups in the world. Finished beverage products bearing its trademarks, sold in the United States since 1886, are now sold in more than 200 countries. Along with Coca-Cola, the Company markets nonalcoholic sparkling brands, including Diet Coke, Fanta and Sprite. It manufactures beverage concentrates and syrups, which the Company sells to bottling and canning operations, fountain wholesalers and some fountain retailers, as well as finished beverages, which the Company sells to distributors. The Company owns or licenses more than 450 brands, including diet and light beverages, waters, enhanced waters, juices and juice drinks, teas, coffees, and energy and sports drinks. The company is one of numerous competitors in the commercial beverages market. Of the approximately 53 billion beverage servings of all types consumed worldwide every day, beverages bearing trademarks owned by or...
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