Financial Reporting, Financial Statement Analysis and Valuation
8th Edition
ISBN: 9781285190907
Author: James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
Publisher: Cengage Learning
expand_more
expand_more
format_list_bulleted
Question
Chapter 5, Problem 1QE
To determine
Describe the significant risks that are identified by the company, and also discuss whether any of these unexpected.
Expert Solution & Answer
Explanation of Solution
It is required by SEC that the major risks are to be identified by the companies with Item 1A of Form 10-K. Around fifty risks are identified by Company F. Most of its business aspects are covered by these risks. The difficulties of running a business are highlighted by these risks. The risk disclosures of Company F have high visibility around the world, and so, they are extensive in part.
As a result of Company F’s CEO’s control on majority of the voting stock, he has control over key decision making. This is one of the intriguing risk factors. Issues in connection with benefits of management ownership of firms are raised by the risk factor. In extreme cases, the costs of such ownership possibly outweigh these issues.
Want to see more full solutions like this?
Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!
Students have asked these similar questions
The SEC requires that companies disclose risk(s). For this exercise obtain the latest form 10K for Facebook
Locate and describe the significant risks the company identifies. Are any of these unexpected based on your previous knowledge of the company?
Choose the correct. What is a prospectus?a. A document attached to a Form 8–K.b. A potential stockholder as defined by Regulation S–K.c. A document a company files with the SEC prior to filing a registration statement.d. The first part of a registration statement that a company must furnish to all potential buyers of a new security.
What is a prospectus?a. A document attached to a Form 8–K.b. A potential stockholder as defined by Regulation S–K.c A document a company files with the SEC prior to filing a registration statement.b. The first part of a registration statement that a company must furnish to all potential buyers of a new security.
Chapter 5 Solutions
Financial Reporting, Financial Statement Analysis and Valuation
Ch. 5 - Prob. 1QECh. 5 - Prob. 2QECh. 5 - A firm has experienced an increasing current ratio...Ch. 5 - A firm has experienced a decrease in its current...Ch. 5 - Prob. 5QECh. 5 - A firm had the following values for the four debt...Ch. 5 - Prob. 7QECh. 5 - Prob. 8QECh. 5 - Prob. 9QECh. 5 - Prob. 10QE
Ch. 5 - Market equity beta measures the covariability of a...Ch. 5 - Altmans bankruptcy risk model utilizes the values...Ch. 5 - Calculating and Interpreting Risk Ratios. Refer to...Ch. 5 - Refer to the financial state-ment data for...Ch. 5 - Refer to the profitability ratios of Coca-Cola in...Ch. 5 - Delta Air Lines, Inc., is one of the largest...Ch. 5 - Prob. 17PCCh. 5 - Prob. 18PCCh. 5 - Prob. 19PCCh. 5 - Prob. 20PCCh. 5 - Prob. 21PCCh. 5 - Prob. 22PCCh. 5 - Compute the values of each of the ratios in...
Knowledge Booster
Similar questions
- Discuss some of the security issues related to e-business and recommend control activities. Why should the product and financial stability of the companies that are on your short list pf AIS be investigated?arrow_forwardWhy is it important for a firm such as EY, in a case such as Groupon, to fully understand the nature of risk when a company conducts its business online?arrow_forwardMs. Fatema started his auditing service for various types of companies in the year 2020. Can you explain her about acceptable audit risk, client business risk, and risk of material misstatements? When she what to consider these types of risks?arrow_forward
- If a company purchased cryptocurrencies valued at $53,500, explain how should the company report the cryptocurrencies in the financial statements? DISCUSS the answers to the above question. You need to explain your answers sufficiently.arrow_forwardAnswer at least 400 words. suppose your audit firm is in the intitial planning phase for the audit of apple for the year ended September 25, 2021. As the audit senior, you have been assaigned responsibility for gathering and summarizing information necessary to evaluate Apple's business risk. Required: Go to Apple's website (investor.apple.com) and explore the website. Click on the "SEC filings" link. Obtain the most recent SEC form 10-K (annual report for the fiscal year ended September 26, 2020) provided for Apple. Based on the information obtained from the website and your know ledge of the industry: 1. Prepare a memo discussing your understanding of Apple and its envirioment. Evaluate Apple's performance and the risk of misstatement, be sure to describe your reasoning.arrow_forwardAnswer at least 400 words. suppose your audit firm is in the intitial planning phase for the audit of apple for the year ended September 25, 2021. As the audit senior, you have been assaigned responsibility for gathering and summarizing information necessary to evaluate Apple's business risk. Required: Go to Apple's website (investor.apple.com) and explore the website. Click on the "SEC filings" link. Obtain the most recent SEC form 10-K (annual report for the fiscal year ended September 26, 2020) provided for Apple. Based on the information obtained from the website and your know ledge of the industry: 1. Prepare a memo discussing your understanding of Apple and its envirioment. Evaluate Apple's performance and the risk of misstatement, be sure to describe your reasoning. 2. Professional auditing standards provide guidance on the auditor's consideration of an entity's business risks. What is the auditor's objective for understanding and entity's business risks? why does an auditor not…arrow_forward
- select a “start-up” company in an industry of your choice and provide a brief summary description of the start-up company you chose and the goods or services it provides. 1. As a start-up company, identify three Credit Risks the company currently faces today or could face in the future. Explain in detail why these risks are a threat to the company. 2. What advice would you give to the CEO of the company to prevent or minimize these credit risks?arrow_forwardThe Securities and Exchange Commission: Multiple Choice verifies the accuracy of the information contained in the prospectus. publishes red herrings on prospective new security offerings. examines the prospectus during the Green Shoe period. reviews registration statements to ensure they comply with current laws and regulations.arrow_forwardShould financial statement disclosures be greater? What are the pros and cons for the increased financial information being disclosed by public companies on their company's internet websites?arrow_forward
- according to the conditions on the pic to answer the question : Discuss two of the differences in business risks between each company and the potential implications for an investor.arrow_forwardBy taking into account information from the latest programme of Walmart (ethics and compliance) and the new GDPR data protection legislation, provide a summary of your key concerns about ethical, legal and professional implications associated with information handling and security 900 wordsarrow_forwardImagine that you are a financial manager researching investments for your client. Think of a friend or a family member as a client. Define their characteristics and goals such as an employee or employer, relatively young (less than 40 years) or close to retirement, having some savings/property, a risk taker or risk averter, etc. Next, use Nexis Uni at the Strayer University library, located at Nexis Uni, click on “Company Dossier” to research the stock of any U.S. publicly traded company that you may consider as an investment opportunity for your client. Your investment should align with your client’s investment goals. (Note: Please ensure that you are able to find enough information about this company in order to complete this assignment. You will create an appendix, in which you will insert related information.) Provide a rationale for the stock that you selected, indicating the significant economic, financial, and other factors that led you to consider this stock. Suggest the…arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Financial Reporting, Financial Statement Analysis...FinanceISBN:9781285190907Author:James M. Wahlen, Stephen P. Baginski, Mark BradshawPublisher:Cengage Learning
Financial AccountingAccountingISBN:9781305088436Author:Carl Warren, Jim Reeve, Jonathan DuchacPublisher:Cengage Learning
Financial Reporting, Financial Statement Analysis...
Finance
ISBN:9781285190907
Author:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
Publisher:Cengage Learning
Financial Accounting
Accounting
ISBN:9781305088436
Author:Carl Warren, Jim Reeve, Jonathan Duchac
Publisher:Cengage Learning