Risk assessment occurs at the financial statement level. Identify what you consider to be significant accounting policy areas for your company. “Significant” implies two characteristics:
Callaway Golf Company
the financial statement is in 10k
Risk assessment occurs at the financial statement level. Identify what you consider to be significant accounting policy areas for your company. “Significant” implies two characteristics: (1) the policy surrounds a transaction(s) that is material to the company, and (2) there exists some complexity with regard to the accounting choice(s) the company is making. For example, almost all notes to the financial statements contain an accounting policy note (almost always Note 2) – most will also refer to an accounting policy on cash and cash equivalents. Unless your company uses cash in some unique fashion, this is a boilerplate disclosure that really is meaningless. Find a footnote that matters – one that has an effect on company’s strategies for their overall corporate objectives The MD&A (management’s discussion and analysis) is also required to describe critical accounting policies; however, not all policies listed are really critical. Describe the policy and provide an explanation as to why the policies you selected are critical.
1) Select one (you can always select more if you think necessary) of the significant accounting policies and:
· Explain why this policy is important to your company.
· Provide a detailed explanation of the technical guidance with respect to this policy.
· Describe how your company’s choices with respect to that significant or risky accounting policy or estimate compare with that of your company’s competitors?
· Are there other alternatives or choices that might be selected for these types of transactions?
· Do these accounting policies seem aggressive or conservative?
To respond to this question you are almost certainly going to have to review the accounting guidance on the type of transactions you selected – don’t be shy – use the Accounting Standards Codification to gather the current guidance on your policy. Access to the ASC is posted on the course’s Blackboard site.
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