What information is in the auditor and management letters in The J.M. Smucker Company’s Form 10-K?

The J. M. Smucker Company (SJM) was started in 1897 by Jerome Monroe Smucker in Orrville, Ohio. The J. M. Smucker Company has several well-known brands in its lineup, including Jif, Folgers, Pillsbury, and Hungry Jack.

Since The J. M. Smucker Company is publicly-held, it issues a Form 10-K each year.  It is also required to have an audit each year.

See the following excerpts from The J. M. Smucker Company’s Form 10-K for 2014:

1. Report of Independent Registered Public Accounting Firm on Internal Control over Financial Reporting (page 36);
2. Report of Independent Registered Public Accounting Firm on the Consolidated Financial Statements (page 37); and
3. Report of Management on Responsibility for Financial Reporting (page 38).

Questions

1. What is management’s responsibility related to the financial statements and related financial information in the Form 10-K?
2. Who is Smucker’s independent audit firm? What is the auditor’s responsibility related to the financial statements and related financial information in the Form 10-K?
3. What does an internal audit department do?
4. Does the audit guarantee that the financial statements are completely correct? How do you know?
5. Why is the auditor’s report important to an investor?

Instructor Resources

These resources are provided to give the instructor flexibility for use of Accounting in the Headlines articles in the classroom. The blog posting itself can be assigned via a link to this site OR by distributing the student handout below. Alternatively, the PowerPoint file below contains a bullet point overview of the article and the discussion questions.

• Student handout (pdf) (word) (contains entire blog posting + discussion questions)
• PowerPoint file (brief article overview + discussion questions)

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