Starbucks is a leading roster, retailer and marketing of field coffee in the world. It operates in 78 markets; this company was formed in the year 1985 (Paryani, 2011). It purchases high-quality roasted coffee that it sells with handcrafted tea, other beverages and coffee and a variety of quality food stuffs through the company's stores. Moreover, the company sells tea and coffee foodstuffs and license its trademarks through other stations such as grocery, foodservice accounts, and licensed stores (Hutt, 2016). The company's objective is to maintain its stand as the most respected and recognized brand in the world. In order to achieve this the company continue to expand its discipline all over the globe by adding more stores, establishing new stores in another region as well as adjusting the fusion of company licensed and functioned stores around the world. This paper portrays different audit reports of Starbuck company as per the form 10-K.
Management's Report on Internal Control
Management's Report on internal control over financial report management is accountable for establishing a satisfactory system on internal control over financial reporting. It deals with the safeguarding of the company's assets from the unauthorized disposition or use and gaining. Most companies report on the segments they own in different regions. Starbucks has four operating sections which include; China /Asia Pacific (CAP), Americas, Channel Development and Europe, Middle East and Africa (EMEA) (Paryani, 2011). The EMEA and CAP sections include both the licensed and company-operated stores. The Americas division is the most successful and mature business which have achieved momentous scale. The company has several non-profitable segments which include; Siren Retail which comprises of Tasting Rooms, Roastery and Starbucks Reserve, Princi and Operation, Starbucks Reserve band store along with the Teavana retail business and Evolution Fresh (Paryani, 2011). The channel Development segment comprises of ground coffee, and whole roasted bean, Teavana and Starbucks single serve products, the variety of ready to drink beverages for example Starbucks double shot, Frappuccino, Teavana and Starbucks refresh.
With the founding of the Global Coffee Alliance with Nestle, a significant portion of Channel Development business transitioned to a licensed model (Dietz, Auffenberg, Chong, Grabs and Kilian, 2018) Furthermore, the foodservice and CPG businesses formerly comprised in the EMEA, Corporate and other segments and Americas were too transitioned to a licensed model in the and realigned Global Coffee Alliance to the Channel Development segment. The company has also collaborated with Tingyi Holdings Corp, PepsiCo and Arla Foods among others for the global prepared to drink beverage business. The Americas store comprise of 122 company functioned stores in Brazil, China Asia Pacific with 1477 licensed store in East China. Starbucks stores are usually located in high visibility and high traffic locations. The stores are located near diversity of setting including suburban and down trade centers, university campuses and office buildings.
Independent Registered Public Accounting Report
Independent Registered Public accounting firm means an organization that with reverence to the firm and any other obligor in the securities, is a self-governing public accounting organization. Correspondingly to other companies and due to the fame of their product, Starbucks is also affected by attempts to the concession of their information technology scheme. To the extent a third party breach to their systems thus causing theft, unauthorized access ruin or other compromises of employees or clients confidential information or data of the company kept in the systems. Cyber-attacks or the internal or external methods which could consequence to loss of material of revenues from the latent adverse which could impact the brand, their ability to attract a new customer or retain customers and the probable disturbance of the company's professional plan (Winter, Colonel and Ruiz, 2017). Security breaches like those could consequences in a violation of related international and U.S. privacy and other subjects and laws us to cloistered customers, business associates, or security trial and governmental proceedings and inquiries, one of this could be an outcome to criminal aptitude or material interior.
For example, the Europe union approved a different rule called General Data Protection Regulation (GDPR) which needs to meet new necessities concerning the handling of personal records with its routine transfer and protection and the ability of an individual whose information is stored and can delete or correct data themselves. Is it fails to meet the GDPR requirement it could upshot in penalties of up to 4% of yearly worldwide incomes (Robles, 2018). The GDPR correspondingly offer deliberates personal right to the action on some of the associations or individuals. When this regulation is followed, they will positively affect the company whereby new customers will be attracted, and the old customer will be retained. On the other hand, the company also have a trading security collection, which contains equity exchange-traded funds and equity joint fund. Interchange securities are chronicled at a reasonable value and estimate a share of the company's obligation under Management Deferred Compensation Plan (MDCP). Losses and gains as of the selection and the alteration in the MDCP are noted in the company's report of earnings, thus assuring their security. The general importance of this report on the company is that the story helps to show how Starbucks have secured its company and the risk that could occur due to poor security. The audit of this report gives a clear record of the company's safety and that of its associate company which they sell their product to.
According to form 10k, the financial statement is designed reasonably. These statements are structured in a way that is in agreement with usually accepted accounting principles. The group of management has organized this report in a way that the profits are well viewed and the losses that encountered the company. According to the audit of Starbucks, the internal control financial reporting gives a clear view of the company, and how it purchases its product and the value, it gains from its customers.
Independent Registered Public Report
The purpose of the independent registered public report is to offer reasonable assurance concerning the dependability of financial reporting and the preparation of financial statements for purposes outside the generally accepted accounting principles (Robles, 2018). According to the Starbucks' audit, failure to meet the market expectations which include; operating cash flow, net revenue, shareholder returns, operating margins, comparable store sales and earnings per share, they will be likely to result in increased volatility or decline in the market price of their stoke. Moreover, materials that could interrupt their roasted coffee stock due to could hurt their business and profitability. This company mainly depends on the success of its employees due to the services of their high-ranking management personnel. If the company loses one of its executive officers, it could cause great harm to the company. This official personnel's help in the creation of high work performance among the employees thus letting the company make high profits.
Starbucks procedures and policies are designed to fulfill accounting, reporting requirement, tax rules, and applicable laws. The intricacy of the controlling the governing environment in which the company function and relay cost of compliance are increasing due to changing legal and additional requirements (Christians, 2016). Additionally, the damage of the brand's reputation when it's business associates to fulfill with the regulations and laws plus variations in regulations laws, increase in the cost of governing restatement and compliance of Starbucks in the financial declaration and a contrary impact on the financial result and business results. The importance of this report is to graft all the financial statements and cases that affect the company, and it gives detailed information about the financial reports outside the company.
Starbuck Company has not maintained its Generally Accepted Accounting Principles (GAAP) this according to the report in the 10K form (Chychyla, Leone and Meza, 2019). According to my opinion from the story the company did not follow the required accounting rules in some circumstances according to what is expected by the company. Review of the story from the company my opinion on the company's financial statement is that the company have understandably presented all its states. This statement is well structured and stated. All the percentage and values are well organized according to what they represent. Due to this structuring of the financial report, it is easy to check on the performance of the company over some time. This company has many clients who buy coffee and other substance. According to the 10k form, the clients have not contributed to the report, and thus their financial statement is not clear and not known.
Chychyla, R., Leone, A. J., & Minutti-Meza, M. (2019). Complexity of financial reporting standards and accounting expertise. Journal of Accounting and Economics, 67(1), 226-253.
Christians, A. (2016). Trust in the tax system: The problem of lobbying. Building Trust in Taxation (2017).
Dietz, T., Auffenberg, J., Chong, A. E., Grabs, J., & Kilian, B. (2018). The Voluntary Coffee Standard Index (VOCSI). Developing a Composite Index to Assess and Compare the Strength of Mainstream Voluntary Sustainability Standards in the Global Coffee Industry. Ecological Economics, 150, 72-87. Retrieved from
Hutt, R. W. (2016). Reputation on the line: the Starbucks cases. Journal of Business Strategy, 37(1), 19-26.
Paryani, K. (2011). Product quality, service reliability and management of operations at Starbucks. International Journal of Engineering, Science and Technology, 3(7), 1-14.
Robles, M. G. (2018). Tax planning in multinational corporations after the discussions referred to immorality of base erosion and profit shifting (BEPS): With focus on Starbucks Corporation (No. 7/2018). UASM Discussion Paper Series.
Winter, R., Colonel, B. A., & Ruiz, R. (2017). cybersecurity, cyber weapons and cyber-attacks: responsibility and different reflections on the subject. Critical Infrastructure Protection Review, 77.
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