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Montclair State University

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Management's Discussion and Analysis of Financial Statements ... Tyson's 11-year data is overkill. Management's Statement of. Responsibility for Annual Report ... – PowerPoint PPT presentation

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Title: Montclair State University


1
Montclair State University
  • Accounting 201
  • Review of
  • Annual
  • Reports

2
Montclair State University
  • Accounting 520
  • Review of
  • Annual
  • Reports

3
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4
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5
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6
Annual Reports
7
Annual Reports
8
Review of Annual Reports
9
Topics To Be Discussed
  • General Format of Annual Reports
  • Management Responsibility for Financial
    Statements
  • Auditors Report
  • Financial Statements
  • Disclosure of Significant Accounting Policies
  • Fiscal Year End
  • Rounding of Amounts

10
Topics To Be Discussed
  • General Format of Annual Reports
  • Management Responsibility for Financial
    Statements
  • Auditors Report
  • Financial Statements
  • Disclosure of Significant Accounting Policies
  • Fiscal Year End
  • Rounding of Amounts

11
General Format of Annual Reports
  • Financial Highlights
  • Letter to the Shareholders
  • Description of Companys Operations
  • Managements Discussion and Analysis of Financial
    Statements
  • Financial Statements
  • Footnotes to Financial Statements
  • Managments Statement of Responsibility for Annual
    Report
  • Auditors Report
  • Multi-Year Statistical Data

12
General Format of Annual Reports
  • Financial Highlights
  • Letter to the Shareholders
  • Description of Companys Operations
  • Managements Discussion and Analysis of Financial
    Statements
  • Financial Statements
  • Footnotes to Financial Statements
  • Managments Statement of Responsibility for Annual
    Report
  • Auditors Report
  • Multi-Year Statistical Data

13
Financial Highlights
14
Financial Highlights
15
Financial Highlights
16
Letter to the Shareholders
  • General Mills had a good year in fiscal 1998,
    achieving record results
  • Sales grew 8 percent
  • Earnings grew 10 percent

17
Letter to the Shareholders
18
Letter to the Shareholders
  • This is a remarkable time ...
  • Some tough work is behind us with much more ahead
  • 1997 was indeed the end of the beginning.

19
Managements Discussion
  • Compare
  • Fiscal
  • Years
  • 1998
  • 1997
  • 1996

20
Managements Discussion
  • Compare
  • Fiscal
  • Years
  • 1997
  • 1996
  • 1995

21
Managements Discussion
  • Compare
  • 1998
  • vs.
  • 1997
  • Compare
  • 1997
  • vs.
  • 1996

22
Managements Discussion
  • Compare
  • 1998
  • vs.
  • 1997
  • Compare
  • 1997
  • vs.
  • 1996

23
Multi-Year Statistical Data
  • Minimum of 5-year statistical data
  • Some balance sheet, some income statement
    information
  • Some non-financial statement information
  • Tysons 11-year data is overkill

24
Managements Statement ofResponsibility for
Annual Report
  • Management is responsible for the information in
    this report. Informed estimates and judgments
    were used that affect the reported amounts in the
    financial statements and disclosures regarding
    contingencies. While the estimates were based on
    managements best judgment at the time, future
    facts and circumstances could change, causing the
    ultimate results to differ from managements
    estimates.

25
Managements Statement ofResponsibility for
Annual Report
  • Management is responsible for the information in
    this report. Informed estimates and judgments
    were used that affect the reported amounts in the
    financial statements and disclosures regarding
    contingencies. While the estimates were based on
    managements best judgment at the time, future
    facts and circumstances could change, causing the
    ultimate results to differ from managements
    estimates.

26
Managements Statement ofResponsibility for
Annual Report
  • Management is responsible for the information in
    this report. Informed estimates and judgments
    were used that affect the reported amounts in the
    financial statements and disclosures regarding
    contingencies. While the estimates were based on
    managements best judgment at the time, future
    facts and circumstances could change, causing the
    ultimate results to differ from managements
    estimates.

27
Managements Statement ofResponsibility for
Annual Report
  • Management is responsible for the information in
    this report. The consolidated financial
    statements were prepared in conformity with
    generally accepted accounting principles.
    Informed estimates and judgments were used for
    transactions not yet completed or for which
    ultimate effects cannot be precisely determined.

28
Managements Statement ofResponsibility for
Annual Report
  • Management is responsible for the information in
    this report. The consolidated financial
    statements were prepared in conformity with
    generally accepted accounting principles.
    Informed estimates and judgments were used for
    transactions not yet completed or for which
    ultimate effects cannot be precisely determined.

29
Managements Statement ofResponsibility for
Annual Report
  • Management is responsible for the information in
    this report. The consolidated financial
    statements were prepared in conformity with
    generally accepted accounting principles.
    Informed estimates and judgments were used for
    transactions not yet completed or for which
    ultimate effects cannot be precisely determined.

30
Managements Statement ofResponsibility for
Annual Report
  • Management is responsible for the information in
    this report. The consolidated financial
    statements were prepared in conformity with
    generally accepted accounting principles.
    Informed estimates and judgments were used for
    transactions not yet completed or for which
    ultimate effects cannot be precisely determined.

31
Managements Statement ofResponsibility for
Annual Report
  • Internal Controls
  • American Generals system of internal controls
    is designed to

32
Managements Statement ofResponsibility for
Annual Report
  • Internal Controls
  • American Generals system of internal controls
    is designed to
  • provide reasonable assurance that assets are
    safeguarded

33
Managements Statement ofResponsibility for
Annual Report
  • Internal Controls
  • American Generals system of internal controls
    is designed to
  • provide reasonable assurance that assets are
    safeguarded
  • that transactions are properly recorded and
    executed, and

34
Managements Statement ofResponsibility for
Annual Report
  • Internal Controls
  • American Generals system of internal controls
    is designed to
  • provide reasonable assurance that assets are
    safeguarded
  • that transactions are properly recorded and
    executed, and
  • that established policies and procedures are
    followed

35
Managements Statement ofResponsibility for
Annual Report
  • Internal Controls
  • American Generals system of internal controls
    is designed to provide reasonable assurance that

36
Managements Statement ofResponsibility for
Annual Report
  • Internal Controls
  • American Generals system of internal controls
    is designed to provide reasonable assurance that
  • assets are safeguarded

37
Managements Statement ofResponsibility for
Annual Report
  • Internal Controls
  • American Generals system of internal controls
    is designed to provide reasonable assurance that
  • assets are safeguarded
  • transactions are properly recorded

38
Managements Statement ofResponsibility for
Annual Report
  • Internal Controls
  • American Generals system of internal controls
    is designed to provide reasonable assurance that
  • assets are safeguarded
  • transactions are properly recorded
  • and executed, and that established policies
    and procedures are followed.

39
Managements Statement ofResponsibility for
Annual Report
  • Tupperware Corp.
  • . . . There are inherent limitations in all
    internal controls systems based on the fact that
    the cost of such systems should not exceed the
    benefits derived. Management believes that the
    Company's systems provide the appropriate balance
    of costs and benefits.

40
Managements Statement ofResponsibility for
Annual Report
  • Lucent Technologies Inc.
  • . . . Even an effective internal control system,
    no matter how well designed, has inherent
    limitations -- including the possibility of
    circumvention or overriding of controls -- and
    therefore can provide only reasonable assurance
    with respect to financial statement presentation.

41
Managements Statement ofResponsibility for
Annual Report
  • MCI Communications Corporation
  • The company maintains a system of internal
    controls designed to . . . provide reasonable
    assurance that assets are safeguarded and
    transactions are recorded and executed with
    managements authorization.

42
Managements Statement ofResponsibility for
Annual Report
  • MCI Communications Corporation
  • The company maintains a system of internal
    controls designed to . . . provide reasonable
    assurance that assets are safeguarded and
    transactions are recorded and executed with
    managements authorization. Internal control
    systems are subject to inherent limitations due
    to the necessity to balance costs incurred with
    benefits provided.

43
Managements Statement ofResponsibility for
Annual Report
  • MCI Communications Corporation
  • The company maintains a system of internal
    controls designed to . . . provide reasonable
    assurance that assets are safeguarded and
    transactions are recorded and executed with
    managements authorization. Internal control
    systems are subject to inherent limitations due
    to the necessity to balance costs incurred with
    benefits provided.

44
Auditors Report
  • We have audited the accompanying consolidated
    balance sheets of McCormick Company,
    Incorporated and subsidiaries as of November 30,
    1998 and 1997 and the related consolidated
    statements of income, cash flows and
    shareholders' equity for each of the three years
    in the period ended November 30, 1998. These
    financial statements are the responsibility of
    the Company's management. Our responsibility is
    to express an opinion on these financial
    statements based on our audits.

45
Auditors Report
  • We have audited the accompanying consolidated
    balance sheets of McCormick Company,
    Incorporated and subsidiaries as of November 30,
    1998 and 1997 and the related consolidated
    statements of income, cash flows and
    shareholders' equity for each of the three years
    in the period ended November 30, 1998. These
    financial statements are the responsibility of
    the Company's management. Our responsibility is
    to express an opinion on these financial
    statements based on our audits.

46
Auditors Report
  • We have audited the accompanying consolidated
    balance sheets of McCormick Company,
    Incorporated and subsidiaries as of November 30,
    1998 and 1997 and the related consolidated
    statements of income, cash flows and
    shareholders' equity for each of the three years
    in the period ended November 30, 1998. These
    financial statements are the responsibility of
    the Company's management. Our responsibility is
    to express an opinion on these financial
    statements based on our audits.

47
Auditors Report
  • We have conducted our audits in accordance with
    generally accepted auditing standards. Those
    standards require that we plan and perform the
    audit to obtain reasonable assurance about
    whether the financial statements are free of
    material misstatement. An audit includes
    examining, on a test basis, evidence supporting
    the amounts and disclosures in the financial
    statements. An audit also includes assessing the
    accounting principles used and

48
Auditors Report
  • An audit includes examining, on a test basis,
    evidence supporting the amounts and disclosures
    in the financial statements. An audit also
    includes assessing the accounting principles used
    and significant estimates made by management, as
    well as evaluating the overall financial
    statement presentation. We believe that our
    audits provide a reasonable basis for our
    opinion.

49
Auditors Report
  • In our opinion, the financial statements
    referred to above present fairly, in all material
    respects, the consolidated financial position of
    McCormick Company, Incorporated and
    subsidiaries at November 30, 1998 and 1997 and
    the consolidated results of their operations and
    their cash flows for each of the three years in
    the period ended November 30, 1998 in conformity
    with generally accepted accounting principles.

50
Auditors Report
  • Standard Unqualified Opinion
  • Explanatory Language Added to Report
  • Opinion of another auditor
  • Uncertainties
  • Consistency
  • Emphasis of matter
  • Qualified Opinion
  • Scope limitation
  • Adverse Opinion
  • Disclaimer

51
Disclosure ofSignificant Accounting Policies
  • Usefulness of financial statements depends on
    users understanding of accounting policies of
    reporting entity

52
Disclosure ofSignificant Accounting Policies
  • Generally
  • Recognition of revenue and expense
  • Specifically
  • Selection from existing alternatives
  • Principles peculiar to particular industry
  • Unusual or innovative applications

53
Disclosure ofSignificant Accounting Policies
  • May be shown
  • separate Summary of Significant Accounting
    Policies section preceding notes
  • initial note

54
Notes to ConsolidatedFinancial Statements
  • Consolidation
  • Fiscal Year
  • Inventories
  • Intangibles
  • Plant Assets
  • Depreciation
  • Pension and Retiree Benefit Plans

55
Notes to ConsolidatedFinancial Statements
  • The consolidated financial statements include The
    Quaker Oats Company and all of its subsidiaries
    (the Company). All significant intercompany
    transactions have been eleminated. . . .

56
Notes to ConsolidatedFinancial Statements
  • The consolidated financial statements include The
    Quaker Oats Company and all of its subsidiaries
    (the Company). All significant intercompany
    transactions have been eleminated. . . .

57
Month of Fiscal Year End
1997 1996 1995
1994 January ................................... 2
4 21 23 23 February ..............................
... 10 11 11 12 March ............................
......... 14 15 15 15 April ......................
................ 10 10 8 8 May ..................
..................... 14 14 16 16 June ...........
............................ 53 57 58 59 July ....
.................................... 11 11 14 14 A
ugust .................................. 14 15 15
15 September .............................. 36 37
35 37 October ..................................
22 23 23 22 November ............................
.. 15 14 17 17 Subtotal .........................
.. 223 228 235 238 December .....................
......... 377 372 365 362 Total
Companies ............ 600 600 600 600
58
Rounding of Amounts
1997 1996 1994 1993 To nearest
dollar 30 33 40 43 To nearest thousand
dollars Omitting 000 349 352 354 352 Presenting
000 13 17 20 22 To nearest million
dollars 208 198 186 183 Total Companies 600 600 60
0 600
59
Review of Annual Reports
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