Use the selection from the annual report of Books-A-Million, Inc., in Appendix A to answer the following questions:

1. When you look at the financial statements for Books-A-Million, can you tell if the company uses a general ledger accounting system? Explain.

2. Find at least four pieces of quantitative information contained in the selection from Books-A-Million’s annual report that would not be found in a general ledger system.

3. Who are the auditors for Books-A-Million?

4. How does having an audit affect a firm’s riskiness?