Question

Using the Securities and Exchange Commissions’ website, select a publicly traded company and review their 10K report for controls and procedures (Item 9 and Item 9A). Discuss your findings and share your thoughts on what the company has disclosed.

EDGAR Company Filing: U.S. Securities and Exchange Commission. Retrieved from http://www.sec.gov/edgar/searchedgar/companysearch.html

Answer 1

Solution: In the light of the above problem, the US number one company i.e. Berkshire Hathaway is taken into consideration.

(A) What are Item 9 and Item 9A?

Item 9 and Item 9A are the contents of the annual report 10K under the purview of Security exchange commission. These items signify the relevance and status of company's internal control and check system as well as the validity and reliability of financials on which the investor's investment decisions are based.

(B) Berkshire Hathaway ( Item 9 and Item 9A)

Under the report, it is mentioned that under the supervision and direction of top management officials i.e. Chief executive officer and chief financial officer of the company following elements were addressed:-

(1) Materiality: Under the supervision of the officials, it was concluded that the companies internal control and check system are sound and effective enough to comply with the principle of materiality in context to the financial information for the investors.

(2) Compliance: The current establishment and working of the internal control and check system are competent enough to comply with SEC norms ( Rule 13a-15 ) to facilitate transparency and effectivity.

(3) Competence: To ensure the competence and effectivity of the present internal control and check system of the company, it has been verified through independent registered public accounting firm and the report made by the respective firm on the competence of internal control and check system is filed with the management report.

(4) No changes: Since the companies, the internal control system is consistent, effective and sustainable looking to the present needs. There are no changes made by the companies.