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
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The previous auditors’ did issue an internal control on financial reporting review and they found that Coca Cola maintained effective internal control over financial reporting for the year 2009. They found this by reviewing all accounting processes for accuracy and detection of errors. The one concern that can be found in the financial statements with regards to internal control is the change in Days sales in accounts receivable. Management needs to review the credit sales terms and make some changes to bring this number back down and closer to 30 days.
Applying Audit Risk Model/Audit Procedures:
Top five areas identified as high risk:
Revenue: Revenue is a high-risk account due to the fact that management will be pressured to overstate the account and look better to shareholders. Revenue recognition rules are complicated to understand and may be overlooked by accounting clerks when entering revenue.
Proposed Audit Procedures: To review the revenue account, especially all transactions occurring at the end of December (to be sure that revenue wasn’t entered in 2009 that shouldn’t be recognized until 2010). All revenue over a material cutoff amount should be confirmed through a letter to customer.
Current Assets: The current asset segment is high risk due to the substantial change in the amount from 2008 to 2009. Specifically, these
According to the International Water Management Institute environmental research organisation global water stress is increasing, and a third of all people face some sort of water scarcity. Where demand exceeds supply and no effective management operates, there will be conflicts between the various players involved.
Water is one of the most precious resources, which support the life of almost everything in the world. Indeed, the world is covered by 75% water, but most of this water is not suitable for human consumption or use. On the same note, the world has been increasing its consumption of water due to the increasing population, leading to increased demands. The increased water consumption, which has been a result of high population, is worrying because the matter may lead to massive water shortages in the future.
Industries are expected to use 265 billow cubic meters of water per year (Doc. D). With that said, there is several industries that rely on water (Doc. D). At the same time, the need for water in agriculture decreases and the need for water in domestic issues gradually increases, while the need for water in industries frantically increases (Doc. C). The requirement of water in industries keeps climbing high year after year as the water supply drops. Moreover, many industries must-have a sizeable quantum of water, which drives the water crisis.
With growing population it is normal to expect this change to affect environmental and health nationwide. By making ourselves aware of these issues allows preparations and changes to decrease chances of diseases and viruses. The biggest environmental concern is obesity because in the last two decades Americans have witnessed noticeable changes in the average body formation by a 10 percent increase. This has become the number one nutritional concern on the public health agenda. Although many do not understand how this obesity epidemic began but speculation is contributed to the environmental changes. Many believe the lack of exercise versus consumption of food is the most logical reason for obesity. The concern of fast food has also remained in the spotlight for unhealthy, greasy, high calorie food. Obesity can contribute to other health concerns such as high blood pressure, heart disease, and diabetes. With growing population and the increase in obesity finding a solution for this concern is important.
Water is probably the most important resource we as people have. Humans can survive without food for several weeks, but without water we would die in less than a week. On a slightly less dramatic note, millions of liters of water are needed every day worldwide for washing, irrigating crops, and cooling industrial processes, not to mention leisure industries such as swimming pools and water-sports centers. Despite our dependence on water, we use it as a dumping ground for all sorts of waste, and do very little to protect the water supplies we have.
Many people know that water is essential for human-being and it is not only valuable for health and life, but water is also important for industry and agriculture. Furthermore, use of water has a spiritual, cultural and recreational dimension. However, water resources are not infinite. Wide and inefficient use of water resources can lead to irreversible consequences, such as water shortage. This essay will firstly discuss the problem of water shortage on examples of developed and developing countries and include the diversification of the same issue in the different parts of the world. It will also identify causes and effects of this environmental problem on society and other spheres of life. Moreover, in this essay I am going to propose
Such things as market leadership, joint ventures, managerial expertise, inventive business solutions, and flexible organizational structure have giving Coca Cola a competitive advantage (Coca-Cola FEMSA, 2010). Coca Cola also provide managerial expertise training programs to improve their abilities, The inquiries for both companies on sugar content in the products have increased. Also there are negative doubts about their recipe of sugar content effecting weight control, pop culture, and society. Over the course of the years Coca Cola have adjusted their recipe because they are using crafty marketing and distributing smaller
Increase in current liabilities Substantial increase in current liabilities weakened the company’s liquidity position. Its current liabilities were US$2,063.94 million at the end of FY2010, a 48.09% increase compared to the previous year. However, its current assets recorded a marginal increase of 25.07% - from US$1,770.02 million at the end of FY2009 to US$2,213.72 million at the end of FY2010. Following this, the company’s current ratio declined from 1.27 at the end of the FY2009 to 1.07 at the end of FY2010. A lower current ratio indicates that the company is in a weak financial position, and it may find it difficult to meet its day-to-day obligations.
In recent years not only is the complex issue of water scarcity a widespread issue but
Background. Revenue is a financial statement item. Accounting for revenue contains standards and principles for revenue recognition. Revenue recognition rules and statutory requirements significantly evolved over the years. It became more detailed for the purpose so financial statement users can understand true company performance and projections.
With growing population it is normal to expect this change to affect environmental and health nationwide. By making ourselves aware of these issues allows preparation and changes to decrease chances of diseases and viruses. The biggest environmental concern is obesity because in the last two decades Americans have witnessed noticeable changes in the average body formation by a 10 percent increase. This has become the number one nutritional concern on the public health agenda. Although many do not understand how this obesity epidemic began but speculation is contributed to the environmental changes. Many believe the lack of exercise versus consumption of food is the most logical reason for obesity. The concern of fast food has also remained in the spotlight for unhealthy, greasy, high calorie food. Obesity can contribute to other health concerns such as high blood pressure, heart disease, and diabetes. With growing population and the increase in obesity finding a solution for this concern is important.
As we are all aware, water is essential to life on earth. It is a common need that plants, animals and humans share. In developed countries we are often consumed with items we think we need, such as clothing or new vehicles. In fact, those may not actually be needs, but are considered wants. Water is essential to survival, but somehow people don't have access to it worldwide.
1. The accounts that may be effected by the risk would be revenue, and cash or accounts receivable.
We usually associate water shortages with a lack of drinking water, but global water scarcity has a critical impact on food security. Agriculture consumes more water than any other source. Climate change is altering patterns of weather around the world, causing shortages and droughts in some areas and floods in others. Water is key to food security. Crops and livestock need water to grow. Agriculture requires large quantities of water for irrigation and various production processes. Water scarcity may limit food production and supply, putting pressure on food prices and increasing countries’ dependence on food imports
The control environment is what sets the tone for an organization and is the foundation for all other components of internal control. It provides discipline and structure and reflects the ethical values, integrity and competencies of the organization. The control environment is very important to effective internal control over financial reporting to an audit client like WorldCom, because good designs can prevent and detect frauds and errors. But because WorldCom had such a poor control environment, the company would require more testing for an audit. This shows that the board did not exercise oversight responsibilities over financial reporting or internal controls.