The purpose of this project was to enable the new student of accounting to familiarize and improve his understanding of the contents of a publicly held company’s (the Coca Cola company) annual report, SEC Form 10-K filing with the Securities and Exchange commission (SEC) as well as the proxy statement.
We were instructed to access the Coca Cola company’s website investor section and to review the SEC filings located there, namely the 10-K and DEF 14A forms. Upon review of those documents, we were asked to answer several questions pertaining to the company and its SEC Form 10-K file with the SEC.
I. Background information
1) Name of the company
(SEC Form 10-K Page 1 Item 1. Business) a) The Coca Cola Company
2) Fiscal year covered by the annual report
(Second Cover Page of Form 10-K) b) Fiscal year that ended December 31, 2010
3) Stock exchange where shares are traded and stock ticker symbol c) New York Stock Exchange: KO.
(SEC Form 10-K 1st and 2nd Cover pages and Page 31)
4) State of incorporation
(SEC Form 10-K Cover Page 2)
5) Describe the company’s business (es), e.g., types of products manufactured.
(SEC Form 10-K Page 1, Item 1 Business and Page 3) e) Manufacturer of nonalcoholic beverage brands which include beverage concentrates, finished sparkling and still beverages
6) What are the Company’s major corporate values?
( SEC Form 10-K Page 36) f) People – Making Coca Cola a great place to work
g) Portfolio – Offering a large portfolio of products that are meet and satisfy desire/demand h) Partners – Nurture a winning network of partners
i) Planet – Being a responsible global citizen
j) Profit – Maximizing returns to shareholders
k) Productivity – Effective management of people, time and money.
II. Audit report
1) Who are the company’s auditors?
(SEC Form 10-K Page 154) a) Ernst & Young LLP
2) What opinion did the auditors issue?
(SEC Form 10-K Page 156) b) Unqualified opinion
3) Did the auditors examine all the evidence supporting the amounts and disclosures in all of the financial statements? Explain.
(SEC Form 10-K Page 156) c) They examined all the financial statements included in the filing. (Consolidated balance sheets, statements of income, shareowner’s equity and cash flows for three years through December 21, 2010.
4) What is the auditor’s responsibility for the financial statements?
(SEC Form 10-K Page 156) d) Auditors must conduct audits on the company’s financial statements using evidence supporting the amounts and disclosures in the financial statements
5) What is management’s responsibility?
(SEC Form 10-K Page 154) e) Creation, preparation and integrity of the company’s financial statements
6) Under the Sarbanes-Oxley Act of 2002, reports on internal control are required. Did the company’s management acknowledge its responsibility for establishing and maintaining adequate internal control over financial reporting? What is the auditor’s opinion on the effectiveness of the company’s internal controls?
(Exhibit 32.1 + SEC Form 10-K Page 157) f) Yes they did. According to their auditors, they felt that the company’s effective internal controls over financial reporting enabled them to provide a reasonable basis for their opinion.
7) What was their internal control system designed to do?
(SEC Form 10-K Page 157) g) It is designed to provide a reasonable assurance regarding the reliability of financial reporting and the preparation of various financial statements for external purposes according to GAAP.
8) In accordance with what standards did the auditors conduct the audit?
(SEC Form 10-K Page 157) h) “Internal Control – Integrated Framework” issued by the Committee of Sponsoring...
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