Coca Cola Auditing Project

AIM 6334 analyseing and bureau Service Research Project pic Li-chung lee Kung Ya Cheng Jui-Ping Lin Table of Contents I. conception. P. 34 II. Ch 1 The lymph gland espousal/continuation process, including establishing an sense with the lymph glandP. 45 III. Ch2 Obtaining an sagaciousness of the entity and its milieu, including natural view as. P. 56 IV. Ch3 preliminary exam Engagement get alongivities P. 6 V. Ch4 esteem assay and Establish bodilyity.. P. 78 VI.Ch5 Consider immanent biddingP. 911 VII. Ch6 intention the examine.. P. 1114 VIII. Ch7 pure(a) the Audit.. P. 15 IX. Ch8 Evaluate results and act an scrutinize tell. P. 16 X. computing device addressP. 17 XI. Attachments.. P. 1823 I. Introduction The coca- locoweed come with (Symbol KO) was incorporated in family line 1919 under the laws of the State of Delawargon and succeeded to the air of a Georgia corporation with the same realize that had been organized in 1892.The corporation is the effec tr, distributer and marter of nonalcoholic beverage concentrates and syrups in the world. Finished beverage products bearing its trademarks, sell in the United States since 1886, argon now sold in more than two hundred countries. Along with coca-Cola, the association markets nonalcoholic reflect brands, including Diet Coke, Fanta and Sprite. It manufacture beverage concentrates and syrups, which the companionship sells to bottling and hatfulning operations, fountain whole salers and near fountain retailers, as sanitary as finished beverages, which the partnership sells to distributors.The ships order owns or licenses more than 450 brands, including viands and light beverages, waters, enhanced waters, juices and juice drinks, teas, coffees, and cypher and sports drinks. The social club is one of numerous competitors in the commercial beverages market. Of the nearly 53 million beverage servings of all types consumed worldwide all day, beverages bearing trademarks owned by or licensed to the troupe account for approximately 1. 5 billion. 1The grounds we chose this connection is beca utilise it has immense market mete out in countries around the world.In order to expand its market sh be, The Coca-Cola association cooperated with the study fast victuals chain family. Today, The Coca-Cola telephoner set about a well known and globalization company. We postulate to know how it drop be sustain qualification and venerability company in the world. From its reports, we in like manner found start it has tremendous benefit from its advertising. In this paper, we byplay that how the attendees build a computable study purpose in such king-sized company and such complex business. II. Ch1 intellectual of the knob There are v major reasons that we consider to accept The Coca Cola political party to be appear thickening. 2 Management Integrity Based upon assertions of everyplacesight ranging from the existence of an element in the fiscal didacticss to disclo authorizeds of information regarding that element, we examines The Coca Cola Company fiscal statements that are no answerable practitioner would knowingly place trust on assertions of a lymph nodes attention which had apocryphal integrity. Relationships with separate Professionals We pull up stakes fol confused gear the GAAS prerequisite to communicate with the forerunner tender forward to committing to go forth visit services to The Coca Cola Company.Matters of chase include the flavors issued by the predecessor attender, resignation of the former attendee or the refusal to stand for reelection, disagreements between the prior attendee and vigilance regarding explanation principles or canvassing occasions and any opinion shopping issues. research of other(a)wise professionals having dealings with the thickening should, however, non be limited to the predecessor auditors. Furthermore, we go forth ask bankers, lawyers, and other professionals can hand all over important valuable information more or less The Coca Cola Company and its worry. guess of Association The Coca Cola Company engaged in legitimate business activities that do not violate the laws of the legal power where the company is headquartered or carries on its business. afterward review articleing its financial statement, we cerebrated that its financial is stability and liquidity. technological Competence The auditors who leave exercise the auditing are well adroit due to the complexities of the innovational business world. And also, the auditors ingest the necessary skilful competence to perform the required pasture or essay potential financial obligation or damage to reputation.Professional Fees Audit fees charged to The Coca Cola Company will base on proportionate with the perils to the providing the services requested. The fees will cover adequately the cost of the services caterd. III. Ch2 Obtaining an unders tanding of the entity and its purlieu In the 21st century, the beverage diligence has been become one of the fastest ontogeny industries and the competition in this industry become strongly. Even in this market address campaign, The Coca Cola Company hitherto remains its leader position in the beverage industry.The Coca-Cola Company and six of their largest bottling partners positive a strategy for sustainability in 2002. That plan porees on the role and impact of the Coca-Cola agreement in four key areas workplace, marketplace, environment and community. Furthermore, The Coca-Cola Company uses this strategy to guide the betterment to sustainability issues and to report the progress. 3 In last form, when carve up of companies in the industry are deprivation down, The Coca-Cola Company still delivering consistent performance.For its home(a) cut back, the company follows the independent and experience essential of NYSE and SEC for many age. And the audit committee has been composed entirely of non-management directors. 4 IV. Ch3 Preliminary Engagement Activities Every member in our audit team is well trained and performs follow by the conduct of AICPA and SEC. Regarding to the honest and independence matter, we has three major requirements. 1. Our auditor deport to sign the contract to sterilise true that he/she will not take a position in the The Coca-Cola Company in two geezerhood 2.We will not hire the auditor who uses to work in The Coca-Cola Company. 3. We required the auditor to report to the partner who has special human relationship with the The Coca-Cola Company. V. Ch4 seek and Establish corporeality The Coca-Cola Company is a globalization company it governances divers(a) issues. For example, Obesity concerns, water scarcity and slimy quality, increased competition, and evolving consumer preferences are risks having the potential to confuse a temporal adverse resultant on our client.To be an auditor, we prise clients RM M (risk of material misstatement) with understanding the client entity and industry. ulteriorly audit risk is set, we go further to quantifyes infixed and control (environment) risks. In addition, assessing clients intact and control risks which can influence the level of catching risk directly. Base on the case, we sacrifice an assumption in order to fight down the audit risk. The following table shows numerical and non-numerical example of audit risk. Audit Risk RMM DR IR CR 5% 50% 20% 50% low hold in low moderate Audit risk on most engagements is much abase than 5%. 5According to conservative assumptions that we decide inherent risk is assessed at moderate (50%). The Coca-Cola Company is a multinational company, so thither are not only very much of accounts due which come from unalike branches in the world, but also lots of inventories which were do or stored in different factories and warehouses in the world. As the reasons above, The Coca-Cola Company white thorn casing some risks, such as is there reason to believe that receivables include significant balances in outside currencies?Is there reason to believe that the existence of the accounts receivables which generate from different abroad branch companies or subsidiaries? are there significant foreign up-to- durationness inventories balance? ar manufactured inventories transferred between locations, divisions, or subsidiaries within a consoli heard entity? Are there material-inventories owned by the client but held by others (e. g. , on consignment with customers)? Therefore, we should assess the inherent risk in moderate level.On the terms of our experience, after we read the predecessor auditors report and our clients past annual report. We presumed that our client has well subjective control so that we can assess the control risk in low level. Overall, in order to sustain the audit risk in low level, we decided our detection risk in moderate level. Besides, in our clien ts industry there are some companies that try to inflate their revenue and assets so in our audit we will focus on run cycle.In other words, we will put emphasis on auditing accounts receivable and inventory to bring about confident(predicate) there are no major method of business relationship schemes or fraud that will mislead the toastation of financial statements. Materiality Materiality includes some(prenominal) the nature of the misstatement, as well as the dollar sign marrow of misstatement, and must be judged in sizeableness by financial statement users. 6 In our engagement, we will use the nature and dollar amount to decide what materially is for our client as the follow chart. Account Accounts receivable roll Materiality Nature 1. blob revenue in wrong catamenia 1. Easy to thief 2. The existence of the A/R 2.Hard to count the decision balance 3. Risk of foreign gold ex lurch Dollar amount In our steadfastlys polity, in manufacture industry we adopt the 10% of give the axe income afterThe same as remaining column. tax to decide the materiality. For example, the gelt income 2007 reproduce 10% $5,981M*10%=600M VI. Ch5 Consider inwrought curtail 1. Define inside Control According to the COSOs definition of sexual control, a process, effected by an entitys board of directors, management, and other personnel intentional to provide reasonable authority regarding the achievement of objectives in the following categories (1) reliability of financial account, (2) compliance with applicable laws and regulations, and (3) effectiveness and might of operations. 7 2. Identify some controls that would be germane(predicate) to the audit. Account Accounts receivable declination-taking Control Authority Inquire about commendation procedure for brisk customers (Valuation) When shipping the Inventory to vendor or supplier, the From a universe of approved gross gross sales orders (and returns), select aware houseman should get the proper agency shipping adjudicate and examine documents for recite of trust check document. (Valuation) clench trick out daily specie summary (copy to A/R and Accounting) Observe physical controls over inventory. separationism of duty Mailroom & cashier Segregation of duty Warehouse & Shipping save holding Trace a sample of shipping documents (selection from pre-numbered The perpetual records should reconcile to the normal shipping documents) to sales invoice, sales journal, and A/R ledger. master file (Completeness) The balancing of Inventory and the Lower or market Match remittance advices and check set summary price valuation should be review by proper accounting manager or management. 3. Discuss the components of Internal Control Control environment subsequently we understand the internal control procedure and insurance, we ensure that our client has ideal control procedure, high ethical standard, and monitoring processes. Risk legal opinion Risk exist in the oversea marketplace (in failures to merge mainland China companies) In failures to accurately record and report financial information. Control activities Authority Custody Segregation of duty Recording keeping Information and Communication Our client has good information and communication function including initiating, authorizing, recording, processing, and account entity transactions, conditions, and events. Monitoring Our client use figurer accounting software and system to assess the quality of other transaction and working(a) controls over time. It includes the periodic assessment of both the design and operation of controls on a timely basis. 4. The elements involved in obtaining an understanding of Internal Control We should obtain an understanding of the five components of internal control fitting to A. Evaluating the design of relevant controls and determining whether they sustain been implemented. B. Assess the r isk of material misstatement. C. objective the nature, extent, and timing of further audit procedures. 5. gravel Control Risk We should assess the inherent risk in moderate level.On the basis of our experience, after we read the predecessor auditors report and our clients internal control procedures. We can presume that our client has well internal control so we can assess the control risk in low level. 6. Managements Responsibilities and the auditors responsibilities under Section 404. Managements The auditors Laws or standards Sarbanes-Oxley Act of 2002 ( for publicly traded Second standard of fieldwork companies) 2. PCAOB Auditing standardized No. (AS 5) Responsibilities In addition to certifying the companys financial Auditors must provide their opinion on the effectiveness of statements (Section 302), management must also report on clients internal control. the companys internal control over financial reporting (Section 404). (Chris Linsteadt, 2008 Audit fa mily Slides ch6) VII. Ch6 intention the Audit 1. Assess the lack for specialists In our case, we should hire some computer audit experts who can help our firm to make sure that our clients accounting system is sate and correct. 2. Assess the guess of illegal acts. Risk The possibility of illegal acts Is there reason to believe that the existence of the accounts There were some dodge transactions which were do by management or employees. receivables which generate from different oversea branch companies or If the sales go intot get proper credit authority, there will be long bad debt subsidiaries? expense in the forthcoming Are there material-inventories owned by the client but held by others The management whitethorn try to inflate the sales in the end of social class so he may try to (e. g. , on consignment with customers)? recognize consignment as sales revenue. The management may use consignment to control the companys ending inventory or COGS. Are manufacture d inventories transferred between locations, divisions,The management may use complicated cogitate troupe transaction to generate fake or subsidiaries within a amalgamated entity? sales or ending inventory. The employees may have chance to steal the coke recipe or inventories. 3. Identify related parties after(prenominal) we discussed with the management and checked the related party transactions, there is no material related party transaction in this engagement. 4. run preliminary analytical procedures. Accounts Receivable Inventory equate with industry rate to make sure our clients A/R derangement rate and Compare with industry rate to make sure our clients inventory turnover long time are reasonable. rate and days are reasonable. Compare our clients allowance for doubtful account policy with competitorsMake sure the qualifying in our clients inventories is reasonable without policy to make sure the bad debt expenses are reasonable estimated. material misstatem ent. Make sure the deviate in our clients A/R is reasonable without material misstatement. 5. Consider additional value added services. After we obtain and understand our clients internal control, we should detect our clients internal control. We can prepare a feedback report to our client and help our client to improve their internal control or accounting system. Besides, when our clients face some problems about new accounting standards, we could help our clients to train their accountants 6. Audit Plan and Audit program. Receivables Name of Client time period Estimated audit hours Audit procedures get and date by Working paper Ref. auditors 01. examine PROPRIETY OF REVENUE RECOGNITION POLICIES AND PROCEDURES Receivables Validity, Cutoff 02. fix RECEIVABLES Validity, Completeness, Recording, and Cutoff Q04 No 03. strain THE ALLOWANCE FOR DOUBTFUL ACCOUNTS AND gravid DEBT EXPENSE Valuation 04. running play PRESENTATION OF RECEIVAB LES Presentation 05. try LATE CUTOFF OF gross revenue Cutoff Q01A gross revenue Invoices 06. analyse LATE CUTOFF OF gross revenue Cutoff Q01A Initial Records 07.ROLL-FORWARD TEST FOR RECEIVABLES TESTED forward TO class END Validity, Completeness, Recording, Cutoff 08. TEST RECEIVABLES TO posterior money RECEIPTS Validity, Completeness, Recording, Cutoff 09. TEST ALLOWANCES FOR SALES RETURNS AND DISCOUNTS Valuation 10. TEST PRESENTATION OF RELATED-PARTY RECEIVABLES Presentation 11.TEST military rating OF FOREIGN CURRENCY RECEIVABLES Valuation Reviewer Sign get wind 6. Audit Plan and Audit program. Inventory Name of Client effect Estimated audit hours Audit procedures Sign and date by Working paper Ref. auditors 01. refer AND TEST-COUNT INVENTORIES Validity, Completeness, Recording, Cutoff, Valuation 02. TEST THE FINAL INVENTORY compiling Validity, Completeness, Recording, and Cutoff 03. TEST MAR KET VALUATION militia Valuation 04. TEST PRESENTATION OF INVENTORY Presentation 05.TEST LATE CUTOFF OF INVENTORY PURCHASES Cutoff Q05A record Purchases 06. TEST EARLY CUTOFF OF debit NOTES Cutoff 07. TEST BOOK TO PHYSICAL ADJUSTMENTS Validity, Completeness, Recording 08. ROLL-FORWARD TEST FOR INVENTORIES PRICE TESTED PRIOR TO YEAR END Validity, Completeness, Recording, Cutoff 09.TEST ELIMINATION OF INTERCOMPANY pull in Valuation 10. TEST BALANCES DENOMINATED IN FOREIGN CURRENCIES Valuation 11. TEST PRESENTATION OF RELATED-PARTY BALANCES Presentation Reviewer Sign Date VIII. Ch7 Complete the Audit The auditors responsibilities during the completion stage of the audit ahead issuing the audit report, the auditor needs to 1.Perform a last-place review of the audit to be sure the financial statements are fairly presented and the audit certification supports the audit report 2. Assess the ability of the client to continue as a going concern, and 3. Make a final review of the auditors assessment of internal control based on evidence gathered and any material misstatements identified in the financial statement audit. In addition, we should get the management standard letter and letter of audit query to make sure there are no material contingent liabilities and events subsequent to the financial statements and keep communicating with the audit committee. The follow data are made by assumption Contingent Liabilities ensuant events Our client may lose the judicial proceeding about merger in oversea. It will cause a Note divine revelation huge loss for our client. On January8, 2009, our Company sold substantially all of our interest in Vonpar Refrescos S. A. (Vonpar), a bottler headquartered in Brazil. totality proceeds from the sale were approximately $238million, and we accepted a gain on this sale of approximately $71million.Prior to this sale, our Company owned approximately 49 parcel of Vo npars outstanding common spud and accounted for the investiture using the paleness method Our client is a multinational company so it may have the threat of expropriation of assets in a foreign country. Our client may get loss in the exceedingly competitive nonalcoholic beverages industry.If our client signs acquire and sale commitments with its supplier, it may get a huge loss in the future. Other important investments which will change our clients accounting principle akin as above. IX. Ch8 Evaluate results and issue an audit report Independent Auditors Report The instrument panel of Directors and short letterholders The Coca-Cola CompanyWe have audited the amalgamate balance sheets of the Coca-Cola Company and subsidiaries (the Company) as of declination 31, 2007 and 2008, and the related consoli go out statement of income, burgeon forthholders righteousness and cash flows for all(prenominal) of the years in the three-year period cease celestial lat itude 31, 2008. These consolidated financial statements are the duty of the Companys management. Our responsibility is to express an opinion on these consolidated financial statements bases on our audits. We conducted our audits in conformation with the standards of the common Company Accounting inadvertency Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are vacate of material misstatement.An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the consolidated financial statements refereed to above present fairly, in all material respects, the financial position of the Coca-Cola Company and subsidiaries as of celestial latitude 31, 2007 and 2008, and the results of their operations and their cash flows for each of the years in the three-year period ended December 31, 2008, in conformity with accounting principles for the most part accepted in the United States of America.We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the effectiveness of the Companys internal control over financial reporting as of December 31, 2008, based on criteria established in Internal Control-Integrated manikin issued by the Committee of Sponsoring Organizations of the Treadway Commission(COSO), and our report dated March 14, 2009 expressed an unqualified opinion on the effectiveness of the Companys internal control over financial reporting. Lee &Cheng &Lin LLP Dallas, U. S. A. March 14, 2009 X. References The company description, market watch http//www. marketwatch. om/tools/quotes/profile. asp? symb=ko Deppe, Larry A. , Client espousal what to look for a nd why. (Tips for accountants on deciding which new clients to accept) (Cover Story), The CPA Journal , May 1992, strategic vision, The Coca Cola Company website 2008The proxy statement, The Coca Cola Company website, Chris, Linsteadt, 2008 Audit Class Slides Rittenberg, Schwieger, Johnstone. Auditing, A Business Risk Approach. Thomson&South-Western Publishing. 6th,2008 SEC register The Coca Cola Company website Retrieved from the arena Wide Web XI. Attachment (Financial tales) unite proportion canvass coca congeal cola CO 10-K 02/28/2008 ? counterpoise Sheet December 31, 2007. 00 2006. 0 (In millions except par value) ? ? ASSETS ? ? ? ? CURRENT ASSETS ? ? ? ? funds and cash equivalents $4,093 $2,440 marketable securities ? 215 ? 150 Trade accounts receivable, less allowances ? 3,317 ? 2,587 of $56 and $63, one by one Inventories ? 2,220 ? 1,641 Prepaid expenses and other assets ? 2,260 ? 1,623 tally CURRENT ASSETS ? 12,105 ? 8,441 INVESTMENTS ? ? ? ? Equity method investments ? ? ? ? Coca-Cola Enterprises Inc. ? 1,637 ? 1,312 Coca-Cola Hellenic Bottling Company S. A. ? 1,549 ? 1,251 Coca-Cola FEMSA, S. A. B. de C. V. ? 996 ? 835 Coca-Cola Amatil Limited ? 806 ? 817 Other, principally bottling companies ? 2,301 ? 2,095 and critical point ventures Cost method investments, principally ? 488 ? 473 bottling companies nub INVESTMENTS ? 7,777 ? 6,783 OTHER ASSETS ? 2,675 ? 2,701 PROPERTY, PLANT AND EQUIPMENT shekels ? 8,493 ? 6,903 TRADEMARKS WITH enigmatic LIVES ? 5,153 ? 2,045 GOODWILL ? 4,256 ? 1,403 OTHER INTANGIBLE ASSETS ? 2,810 ? 1,687 total ASSETS $43,269 $29,963 LIABILITIES AND SHAREOWNERS fair-mindedness ? ? ? ? CURRENT LIABILITIES ? ? ? ? Accounts payable and increase expenses $6,915 $5,055 Loans and notes payable ? 5,919 ? 3,235 Current maturities of long-term debt ? 133 ? 33 Accrued income taxes ? 258 ? 567 TOTAL CURRENT LIABILITIES ? 13, 225 ? 8,890 long DEBT ? 3,277 ? 1,314 OTHER LIABILITIES ? 3,133 ? 2,231 DEFERRED INCOME TAXES ? 1,890 ? 608 SHAREOWNERS lawfulness ? ? ? ? Common stock, $0. 25 par value Authorized 5,600 ? 880 ? 878 shares Issued 3,519 and 3,511 shares, respectively Capital surplus ? 7,378 ? 5,983 Reinvested earnings ? 36,235 ? 33,468 hoard other comprehensive income ? 626 ? (1,291) (loss) exchequer stock, at cost 1,201 and 1,193 ? ? shares, respectively TOTAL SHAREOWNERS EQUITY ? 21,744 ? 16,920 TOTAL LIABILITIES AND SHAREOWNERS EQUITY $43,269 $29,963 fused Income Statement COCA COLA CO 10-K 02/28/2008 ? Income Statement twelvemonth Ended December 31, 2007. 00 2006. 00 (In millions except per share data) ? ? NET run REVENUES $28,857 $24,088 Cost of goods sold ? 10,406 ? 8,164 GROSS bread ? 18,451 ? 15,924 Selling, general and administrative expenses ? 10,945 ? 9,431 Other direct charges ? 254 ? 185 operational INCOM E ? 7,252 ? 6,308 Interest income ? 236 ? 193 Interest expense ? 456 ? 220 Equity income net ? 668 ? 102 Other income (loss) net ? 173 ? 195 Gains on issuances of stock by equity method ? ? ? ? investees INCOME BEFORE INCOME TAXES ? 7,873 ? 6,578 Income taxes ? 1,892 ? 1,498 NET INCOME $5,981 $5,080 staple NET INCOME PER SHARE $2. 59 $2. 16 DILUTED NET INCOME PER SHARE $2. 57 $2. 16 AVERAGE SHARES outstanding ? 2,313 ? 2,348 cause of dilutive securities ? 18 ? 2 AVERAGE SHARES OUTSTANDING ASSUMING DILUTION ? 2,331 ? 2,350 Consolidated Statements of Cash Flows COCA COLA CO 10-K 02/28/2008 ? Cash Flows ? ? ? ? ? ? ? ? Year Ended December 31, 2007. 00 2006. 00 (In millions) ? ? ? OPERATING ACTIVITIES ? ? ? ? last income $5,981 $5,080 Depreciation and amortization ? 1,163 ? 938 Stock-based recompense expense ? 313 ? 324 Deferred income taxes ? 109 ? (35) Equity income or loss, net of dividends ? (452) ? 124 Foreign currency adjustments ? 9 ? 52 Gains on issuances of stock by equity investees ? ? ? ? Gains on sales of assets, including bottling ? (244) ? (303) interests Other operating charges ? 166 ? 159 Other items ? 99 ? 233 final change in operating assets and liabilities ? 6 ? (615) clear up cash provided by operating activities ? 7,150 ? 5,957 investment funds ACTIVITIES ? ? ? ? Acquisitions and investments, principally ? (5,653) ? (901) beverage and bottling companies Purchases of other investments ? (99) ? (82) continue from disposals of other investments ? 448 ? 640 Purchases of property, plant and equipment ? (1,648) ? (1,407) Proceeds from disposals of property, plant ? 239 ? 112 and equipment Other investing activities ? (6) ? (62) dismiss cash used in investing activities ? (6,719) ? (1,700) pay ACTIVITIES ? ? ? ? Issuances of debt ? 9,979 ? 617 Payments of debt ? (5,638) ? (2,021) Issuances of stock ? 1,619 ? 148 Purch ases of stock for treasury ? (1,838) ? (2,416) Dividends ? (3,149) ? (2,911) Net cash provided by (used in) financing ? 973 ? (6,583) activities power OF EXCHANGE RATE CHANGES ON bullion ? 249 ? 65 AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS ? ? ? ? Net increase (decrease) during the year ? 1,653 ? (2,261) counterweight at source of year ? 2,440 ? 4,701 rest at end of year $4,093 $2,440 Consolidated Statements of Shareowners Equity COCA COLA CO 10-K 02/28/2008 ? CONSOLIDATED STATEMENTS OF SHAREOWNERS146 EQUITY Year Ended December 31, 2007. 00 2006. 00 (In millions except per share data) ? ? ? NUMBER OF COMMON SHARES OUTSTANDING ? ? ? ? oddment at rootage of year ? 2,318 ? 2,369 Stock issued to employees example stock ? 8 ? 4 options Purchases of stock for treasury 1 ? (35) ? (55) Treasury stock issued to employees exercising ? 23 ? ? stock options Treasury stock issued to former shareholders ? 4 ? ? of glaceau sense of equilibrium at end of year ? 2,318 ? 2,318 COMMON STOCK ? ? ? ? residue at beginning of year $878 $877 Stock issued to employees exercising stock ? 2 ? 1 options Balance at end of year ? 880 ? 878 keen SURPLUS ? ? ? ? Balance at beginning of year ? 5,983 ? 5,492 Stock issued to employees exercising stock ? 1,001 ? 164 options Tax (charge) benefit from employees stock ? (28) ? 3 option and restricted stock plans Stock-based payment ? 309 ? 324 Stock purchased by former shareholders ? 113 ? ? of glaceau Balance at end of year ? 7,378 ? 5,983 REINVESTED dough ? ? ? ? Balance at beginning of year ? 33,468 ? 31,299 version for the cumulative effect on ? (65) ? ? prior years of the adoption of recital No. 48 Net income ? 5,981 ? 5,080 Dividends (per share $1. 36, $1. 24 and $1. 12 ? (3,149) ? (2,911) in 2007, 2006 and 2005, respectively) Balance at end of year ? 36,235 ? 33,468 hive away OTHER COMPREHENSIVE INCOME ? ? ? ? (LOSS) Balance at beginning of year ? (1,291) ? (1,669) Net foreign currency translation adjustment ? 1,575 ? 603 Net gain (loss) on derivatives ? (64) ? (26) Net change in unrealized gain on available-for-sale ? 14 ? 43 securities Net change in pension liability ? 392 ? ? Net change in pension liability, prior ? ? ? 46 to adoption of SFAS No. 58 Net other comprehensive income adjustments ? 1,917 ? 666 Adjustment to initially apply SFAS No. 158 ? ? ? (288) Balance at end of year ? 626 ? (1,291) treasury STOCK ? ? ? ? Balance at beginning of year ? (22,118) ? (19,644) Stock issued to employees exercising stock ? 428 ? ? options Stock purchased by former shareholders ? 66 ? ? of glaceau Purchases of treasury stock ? (1,751) ? (2,474) Balance at end of year ? (23,375) ? (22,118) TOTAL SHAREOWNERS EQUITY $21,744 $16,920 COMPREHENSIVE INCOME ? ? ? ? Net income $5,981 $5,080 Net other comprehensive income adjustments ? 1,917 ? 666 TOTAL COMPREHENSIVE INCOME $7,898 $5,746 8 1 http//www. marketwatch. com/tools/quotes/profile. asp? symb=ko 2 http//www. nysscpa. org/cpajournal/old/12543349. htm 3 http//www. thecoca-colacompany. com/citizenship/strategic_vision. hypertext markup language 4 http//www. thecoca-colacompany. com/investors/proxies. html 5 Rittenberg, Schwieger, Johnstone, p105 6 Rittenberg, Schwieger, Johnstone, p101 7 Chris, Linsteadt, 2008 Audit Class Slides Ch6 8 http//ir. thecoca-colacompany. com/phoenix. zhtml? c=94566&p=irol-sec&se