Section 404 of the Sarbanes-Oxley Act of 2002 requires companies to disclose their control procedures. This enables for communication of accumulated information that is contained in the financial reports. It ensures that a company states the management’s responsibility in establishing and maintaining adequate control structures and procedures useful in financial reporting under the Exchange Act and as such allow for timely decisions. Starbucks excluded information on the acquired businesses, such as Starbucks Japan in its evaluation of internal controls since they were in the process of incorporating the acquisition’s internal controls over the financial reporting. Moreover, Starbucks has ensured a reasonable assurance that expenditures and receipts are made in accordance with authority from the management. Segment Information Reporting of segment information is useful in providing investors and creditors with information about the financial results and position of a company’s most crucial units, which are useful in decision-making. It is done in the disclosures part that accompanies the financial statements. Starbucks has disclosed four reportable operating segments in its 2015 financial statements. These …show more content…
It also enables financial statement users to ascertain the fair values of financial instruments, the assumptions the company has made with regard to purchase control allocations and impairment tests as well as the measurement and recognition of provisions and future tax benefits. Starbucks has included in the financial statements information concerning transactions related to acquisition of Starbucks Japan in addition to sale of Australia operations. The ongoing amortization expense incurred from intangible assets is also included as well as a $0.02 gain on the sale of the Malaysia equity method