Visit http://www.pearsonhighered.com/Horngren to view a link to Starbucks Corporation’s 2013 Fiscal Year Annual Report. Study the audit opinion (labeled Report of Independent Registered Public Accounting Firm) of Starbucks Corporation and the Starbucks Corporation financial statements. Answer the following questions about the company:
1. What is the name of Starbucks’s outside auditing firm (independent registered public accounting firm)? What office of this firm signed the audit report? How long after the Starbucks year-end did the auditors issue their opinion?
2. Who bears primary responsibility for maintaining effective internal control over financial reporting? How can you tell?
3. Does it appear that Starbucks’s internal controls are adequate? How can you tell?
4. What standard of auditing did the outside auditors use in examining the Starbucks financial statements?
5. By how much did Starbucks’s cash balance (including cash equivalents) change during year ended September 29, 2013? What were the beginning and ending cash balances?
6. Review the notes to the consolidated financial statements, specifically Note 1 dealing with Cash and Cash Equivalents. What type of instruments does Starbucks consider to be cash equivalents?
7. Determine Starbucks’s cash ratio as of September 29, 2013, and September 30, 2012. How do Starbucks’s cash ratios compare with Green Mountain Coffee Roasters as illustrated in the chapter? Explain.