Annual Report Analysis

Annual Report Analysis

Introduction

This paper intends to have a deep rooted understanding of financial statements. The main focus of this paper is to answer the given questions regarding the financial statements and other elements given in the annual report of a company. For this purpose, the company annual report of company chosen is Apple Inc. for the year 2011. This study will further provide a practical insight towards the basic accounting principles and their implementation.

Apple Computers was founded in 1976. The company is considered as one of the groundbreakers of the technological, innovative industry. Apple has its Headquarter in Cupertino, and retail branches located worldwide. The company has more than 10,000 staff. Steve Jobs and Steve Wozniak were the founders of the company. In 1980, the Apple had a massive flop because of considerable technical problems (businessweek.com). But the American multinational has more than one trick up his sleeve and recovered from the flop in 1984 with the first Macintosh that experienced a real world success. This success was followed by many other products with different software and products like the iPod, iPhone or iPad and operating systems to the attention of both business and consumer public. Today, the company Apple Inc is one of the largest multinationals in the world with approximately $ 50 billion in sales in 2009, and it steadily increased over 33% per year.

Discussion

1. Who are the firm's auditors? Do they provide a clean opinion on the financial statements?

In the annual report it was seen that the auditor's gave their opinion regarding the financial statements given therein. The auditor's report stated clearly that they have audited all the financial statements and they provided a fair status in accordance with the generally accepted accounting principles. This reflects that the auditors gave a 'Unqualified opinion', which means that all the items mentioned in the financial statements of the company published in annual represents fair and true value and adheres within the financial reporting framework.

International Financial Reporting Standards (IFRS) aspires to bring the entire nations in the world under a similar set of global accounting standards that presents consistency, transparency, and compatibility in financial reporting system. According to a fact financial regulators in several countries have generated high demand for IFRS compliant financial statement (Mirza, A. et.al, 2011, p.103).

In 113 countries, more than 12,000 companies have implemented IFRS in some degree, and many other countries are enduring to implement the standards each year with the expectation of increased comparability of financial statement.

Implementing IFRS will have a persuasive impact on the projects under accounting systems. It may have an impact on the non-financial companies. IFRS will have an impact on how companies track their leasing information. The audit committees and senior management will see the great impact of the IFRS implementation.

However, the key benefit of published financial report is to create awareness among the public, specifically the share holders. It is their right to know about the core financial details of the ...