ACCOUNTING OF PEPSICO Lesley Cummins American Intercontinental University Francis Hoban December 2012 ABSTRACT This paper will discuss the finding that I came upon during the review of PepsiCo’s annual report. They are a very strong and independent company and a lot could be learned from their accounting tactics. During the PepsiCo audit there were no internal errors to be reported. All consolidated financial statements were presented fairly and accurately during the period of December 26, 2009 to December 25, 2010. The internal control in charge of financial reporting did not show any misstatements (Annual Report, 2010).
PepsiCo maintains strong controls over the financial reporting. The system works off of the framework of the Committee of Sponsoring Organizations of the Treadway Commission (Annual Report, 2010). This system is designed to offer support and reasonable assurance that all transactions are recorded sufficiently. Within the PepsiCo annual report, auditor reports and management reports there were no documented discrepancies or conflicts within the ledgers of the company. PepsiCo prides themselves on doing what is right. They are continuously working to monitor their internal controls through self-assessments and ongoing internal audits.
One option that PepsiCo should institute within their internal auditing department; if they do not already is to require mandatory one to two week annual vacations. This is a safeguard that keeps employees, managers and auditors honest. One thing that PepsiCo does do is keeping the executive committee actively involved. They need to understand the strategy and financial performance of the company. The intent is to ensure that they remain objective and consistently challenging their approach to potential opportunities and issues within the business, as well as monitoring the esults and controls. PepsiCo is very proud to have an active, diligent and capable Board. They meet the required standard for independence. Their audit committee has high standards and is comprised of independent directors with a keen financial literacy, knowledge and an abundance of experience to create a very strong team. Financial Highlights PepsiCo, Inc. and subsidiaries (in millions except per share data; all per share amounts assume dilution) 2010 Scorecard We understand that companies succeed when society succeeds, and what’s good for the world is good for business.
Performance with Purpose ensures that this powerful idea is woven into everything we do at PepsiCo. But equally important, it is proving to be a driver of financial performance for our shareholders today and into the future. We continue to strike the balance between the short term and the long term through investments in acquisitions, research and development and emerging markets. REFERENCES Annual Report. (2010). Report of Independent Registered Public Accounting Firm. Retrieved from: http://www. pepsico. com/annual10/financials/auditor-reports. html
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