Case Study Of Walmart Company: Audits, Financial Report (Case Study Sample)

Accounting
Student’s Name
University/College
Accounting: Report on Financial Statements and Audit Results
Walmart
Management's Report on Internal Control over Financial Reporting
In the fiscal 2017 of the second quarter, the management took accountable of the material weakness in our controls in accounting for leases and disclosing them. On top of that, the management is set accountable for the integrity, preparation, and objectivity of financial statements.
Because of the characteristic limitations, the topic at hand may rather not prevent or detect misstatements due to lack of controls resulted in the material weakness in internal control over financial reporting which in turn later on allowed for the historical misapplication and misinterpretation of Accounting Standards Codification 840, Leases regarding sale-leaseback accounting, and primarily lessee involvement in the construction of leased assets.
As of January 31st, 2017, the effectiveness of the company's internal control over financial reporting as assessed by the management, shows full utilization of criteria set forth by the Committee of Sponsoring Organization(COSO)of the Tradeway Commission in Internal Control-Integrated Framework.
The Company did not have satisfactory controls in place to correctly point out and account for the subjected sale-leaseback accounting guidance, primarily leases in which we made payments for particular structural components subjected in the construction of the leased assets by the lessor, which should rather have resulted in the Company being estimated the owner of the leased assets for accounting purposes.
In the fourth quarter of fiscal 2017, management completed the test, to conclude that the material weakness has been remediated. Under the SEC enacted guidelines, companies are not allowed to exclude acquisitions from the first assessment of internal control over financial reporting ensuing the acquisition date.
The Independent Registered Public Accounting Firm's Report on Internal Control Over Financial Reporting
The Independent auditor state that, the responsibility of management is in maintaining actual internal regulation over financial reporting, and for its validation in the effectiveness of internal control over financial reporting included in the accompanying "Management's Report to Our Shareholders." The auditors are entitled to responsibility of expressing opinions on the Company's internal control over financial reporting.
An audit in ligne with the standards of the Public Company Accounting Oversight Board (United States), required that a proper plan and performance of the audit would end in the audit obtaining reasonable assurance on whether internal control over financial reporting was actually maintained in all material respects.
The Independent audit done included various activities which were to be done, they include; assessing the risk that a material weakness exists, performing such other procedures as they considered necessary in the circumstances, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and obtaining a thoughtful understanding concerning internal control over financial reporting.
A company's internal control over financial planning is a process designated to provide judicious assurance regarding the preparation of the financial statements and reliability of financial reporting for the purposes of external use in accordance with general legal accounting principles. A company's internal control over financial reporting includes those policies and procedures that; first, pertain to the care of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the company's assets; secondly, provide reasonable assurance that transactions are recorded as necessary to permit preparation of accordance with management and directors' authorization of the company; lastly, provide assurance regarding prevention of an unauthorized achievement, use or disposition of the company's assets that could have a material effect on financial statements.
In the opinion laid down by the auditors, Wal-Mart Stores, Inc. maintained, in all material respects, effective internal regulation over financial reporting as of January 31, 2017, based on the criteria laid down by COSO criteria.
In addition to that, projections of effective evaluations to future periods are critical subject to the hazards that controls may become inadequate because of the deterioration of the change in the degree of compliance or altering conditions. Moreover, an indication regarding the accompanying report on the internal control over financial reporting by the assessment laid down by the management did not include Jet.com, which in the fiscal year 2017 was included and consolidated as 1.3% and 0.1% of the consolidation of the company's net sales. However, the addition of the evaluation of the audit of Jey.com internal control over financial reporting was not included.
Explanation of the purpose and content of t...