Audit Reporting Model Discussion
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For Requirement 1, write 5 sentences in total. For Requirement 2, just find a sentence you wrote from requirement 1 and highlight it.
From requirement 3. Write two paragraphs separately.
This assignment covers the Audit Reporting Model discussion and preparation for the in-class discussion.
Company Name: 3M CO
CIK Number: 66740
Year-end Data Date: 20191231
Year: 2019
Ticker Symbol: MMM
Use the SEC’s EDGAR database to look up the company’s annual report
• Follow instructions regarding identifying Company risks
• Go to EDGAR (the SEC’s database of company filings) and look up the company’s most recent annual report filing (Form 10-K or Form 20-F) for the company you chose in step 1. You can follow the link below and enter the CIK number. (Note: Foreign companies that register with the SEC file a Form 20-F rather than a Form 10-K.)
https://www.sec.gov/edgar/
1. Based on your review of the annual report of the 3M CO, list what you believe to be the 5 most significant risks the 3M CO company faces and the financial statement account you believe would be most affected by the risk.
Only need to write One sentence for each risk
2. For the company you reviewed, please enter the descriptions of the CAMs the auditor reported in the annual report. For example, BP’s auditor reported a CAM described as “Impairment of upstream oil and gas property, plant, and equipment (PP&E) assets.” Enter just the description, not the full text of the CAM.
PLEASE HIGHLIGHT THE CAM IN GREEN if it corresponds to one of the most significant risks you identified (or is close enough for the purposes of this class). For example, if you identified the warranty accrual as one of the most significant risks AND the auditor identified the warranty accrual as a CAM, highlight the warranty accrual CAM in green. If the auditor identified the warranty accrual as a CAM and you did not, don’t highlight the CAM. I don’t expect this to take more than about 5 minutes, depending on the number of CAMs the auditor reported.
3. Download BP’s 2019 annual report available here:
https://www.bp.com/en/global/
It’s a big file so you may need wait a minute for it to download.
This annual report has two audit opinions issued by the same auditor for the same year. BP is a UK company traded on the London Stock Exchange and is cross-listed on a US exchange. The 20-F has two audit reports – One is the UK audit report on pages 132-145 and the other is the US audit report on pages 146-149.
Read both audit reports. What are the similarities and differences in audit report for the same company in the same year under two different sets of standards? You can use a list or bullet points to answer this question.
What conclusions do you draw from the lens of a student enrolled in an assurance course? From the lens of a prospective investor? If you could only pick one of the two reports, which one would you choose and why? Your response should be a minimum of one paragraph and no more than one page.
Audit Reporting Model Discussion
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