This assignment is an important starting point for the project, so be sure to dedicate some time to doing preliminary research and making the correct choice. To begin, identify a company to use for each component of the project. Choose a familiar company or one that you are interested in learning more about. For example, if you are interested in technological advances and high-tech devices, you may want to develop your course project around Apple, Inc.

Perform some preliminary research to ensure that your chosen company meets the stated criteria. Conduct some Internet research on investing sites such as Yahoo! Finance (linked in Resources). The selected company must have the following characteristics:

• It must be a U.S.-based company.
• Its stock must be publicly traded on the New York Stock Exchange.
• The company's financial statements must be prepared in accordance with U.S. Generally Accepted Accounting Principles (GAAP).

Once you have identified your company, locate its most recent 10-K filing on the SEC database. It may be helpful to review the SEC EDGAR Tutorial (linked in Resources) before searching your company's recent filings. On the most recent 10-K filing, review the following sections of the report:

• Management discussion and analysis.
• The independent auditor's report.
• Financial statements.
• Footnotes to the financial statements.

Based on your initial research, provide a brief memo in which you complete the following:

• Compare and contrast a publicly traded company from a privately held company, including the role of regulations.
• Provide a brief description of your chosen company. Include the location of its corporate headquarters and reference its use of U.S. GAAP. The reference should be from the 10-K.
• Summarize the significant issues or events described in the management discussion and analysis section and/or the footnotes to the financial statements.
• Identify the independent auditor and evaluate the independent's auditor's opinion, including a discussion on any exceptions noted.

Part B: U.S. GAAP (Second Step of Course Project)

Companies that follow U.S. Generally Accepted Accounting Principles have been provided guidance for the financial reporting of specific transactions and account groups. The Financial Accounting Standards Board establishes these standards. Accounting for transactions can be simplesuch as sales on accountor it can be complicated, in instances such as accounting for an asset retirement obligation.

For this component of the project, refer to the 10-K filing of the company you have chosen and review the notes to the financial statements. Specifically, look at the explanations of the company's accounting policies. Typically, the company's significant accounting policies are identified in Footnote 1.

For this assignment, choose five of the accounting policies. While some accounting policies may be general, consider selecting the accounting policies that are most significant to your company. For example, if you have chosen a manufacturing company, their accounting policies related to inventory valuation and identification of obsolete inventory would be significant. (Hint: Look at the balance sheet: What are the significant account balances?)

Submit a minimum five-page essay (at least one double-spaced page per accounting policy) describing each identified accounting standard, its objective, and the implications of the standard for the company in its financial reporting. Address the following:

• Identify five accounting standards and their objectives.
• Describe the effect of each accounting standard on the company's financial reporting.
• Discuss consequences for violating the accounting standards in terms of regulations and financial reporting.
• Identify any potential or pending accounting standard changes that may impact the company and its financial reporting.

Note: To complete this part of the assignment, you will be expected to use and reference the FASB Codification; refer to the Accounting Research Guide in Resources for the necessary links.

Part C: SEC Reporting Requirements (Third Step of the Course Project)

The U.S. Securities and Exchange Commission (SEC) regulates the actions of and establishes reporting requirements for publicly traded companies. The SEC also has the authority to assess disciplinary actions, such as fines and penalties for reporting violations.

In addition to the filings you have accessed via the SEC website, review SEC Enforcement Actions (linked in Resources) to see if any regulatory actions have been taken against your selected company. (If no regulatory actions have been taken against your company, find some regulatory actions for a company that is similar to yours. You will use them as examples of actions that could be used against your own company for this assignment.)

Summarize your findings in a two-page (double-spaced) memo that includes your analysis of the following components:

• The role of the SEC as a regulator.
• Findings and consequences stated in the comment letters for the company. (If your selected company does not have any findings, discuss the findings of similar companies, using them as examples that could occur.)
• Implications of future violations.
• Actual or potential effect of these actions for the company, such as drop in market price or loss of investors.
• Corrective actions made to address these issues (if possible). For example, incorrect reports were caught and required a resubmission of financial statements.

Resources

• SEC Enforcement ActionsLinks to an external site..
• Week 4: U.S. Securities and Exchange CommissionLinks to an external site..
• Evidence and APALinks to an external site..
• Accounting Research GuideLinks to an external site..

Here are my questions:

• What is Microsoft's Corporation's use of U.S. GAAP?
• A summary of significant issues or events described in the management discussion and analysis section and/or the footnotes to the financial statements?
• Identification of the independent auditor and evaluation of the independent auditor's opinion, including a discussion on any exceptions noted?