Coca Cola Audit Risk
The Coca- Cola Company
Planning Memorandum
Industry and Regulatory Risk Factors:
Obesity/Health Concerns: There is a growing concern among consumers and public health officials about the public health consequences of obesity. This includes a large movement towards health conscious eating and drinking, specifically avoiding sugar-sweetened beverages. This could affect demand for some beverages and in turn affect profitability.
Water scarcity: Water is the main ingredient of all products. It is a limited resource and also facing unprecedented challenges from overexploitation, pollution, poor management and climate change in many parts of the world. As water scarcity and demand both increase, the system may incur increased production costs or face capacity constraints, which could adversely affect profitability.
Governmental Regulation: The Company complies with applicable laws in numerous countries throughout the world. In the USA, this includes the Federal Food, Drug and Cosmetic Act; the Federal Trade Commission Act; the Lanham Act, etc.
Competition: The Company may face some pressure to perform above their many competitors, namely PepsiCo, Inc.; Nestle; Dr Pepper Snapple Group, Inc.; Groupe Danone; Kraft Foods Inc. and Unilever. Competitive factors include pricing, advertising, sales promotion programs, product innovation, increased efficiency in production techniques, and introduction of new packaging.
None of these external risk factors produce a going concern for Coca Cola Company at this point. They should be monitored and updated in the coming years to reassess for the potential of going concern.
Nature of Business:
The Coca-Cola Company is the world’s leading owner and marketer of nonalcoholic beverage brands. 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. As at February 22, 2010 there were approximately 268, 741
Planning Memorandum
Industry and Regulatory Risk Factors:
Obesity/Health Concerns: There is a growing concern among consumers and public health officials about the public health consequences of obesity. This includes a large movement towards health conscious eating and drinking, specifically avoiding sugar-sweetened beverages. This could affect demand for some beverages and in turn affect profitability.
Water scarcity: Water is the main ingredient of all products. It is a limited resource and also facing unprecedented challenges from overexploitation, pollution, poor management and climate change in many parts of the world. As water scarcity and demand both increase, the system may incur increased production costs or face capacity constraints, which could adversely affect profitability.
Governmental Regulation: The Company complies with applicable laws in numerous countries throughout the world. In the USA, this includes the Federal Food, Drug and Cosmetic Act; the Federal Trade Commission Act; the Lanham Act, etc.
Competition: The Company may face some pressure to perform above their many competitors, namely PepsiCo, Inc.; Nestle; Dr Pepper Snapple Group, Inc.; Groupe Danone; Kraft Foods Inc. and Unilever. Competitive factors include pricing, advertising, sales promotion programs, product innovation, increased efficiency in production techniques, and introduction of new packaging.
None of these external risk factors produce a going concern for Coca Cola Company at this point. They should be monitored and updated in the coming years to reassess for the potential of going concern.
Nature of Business:
The Coca-Cola Company is the world’s leading owner and marketer of nonalcoholic beverage brands. 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. As at February 22, 2010 there were approximately 268, 741