Does this business appear to be a retailer, a manufacturer, or a service company? How can you
What business do you believe they are in? Again, what tells you this?
Can you calculate gross profit for this company? Can you calculate their profit margin? Why or
Other Elements of an Annual Report
Outside assignment: Annual reports
Have students pick a company and obtain their annual report online.
Look at the Management’s Discussion
In your own words, what is management’s outlook for the future?
What are their major
strengths and weaknesses?
Look at the Report of the Independent Auditors.
Who audited the financial statements?
What type of audit
opinion did they give?
Answers will vary depending on the company chosen by the student.
In-class discussion: Auditor obligations
Longtop Inc. was the first Chinese software company listed on the New York Stock Exchange. It is a
leading software development and solutions provider targeting the rapidly growing financial services
industry in China.
A company press release dated May 23, 2011 states:
“Longtop Financial Technologies Limited ("Longtop" or the "Company") announced today that the
Company's registered independent accounting firm, Deloitte Touche Tohmatsu CPA Ltd. ("DTT"), has
resigned as auditor of the Company by letter dated May 22, 2011. The Company also announced that Derek
Palaschuk, the Company's Chief Financial Officer, tendered his resignation by letter, dated May 19, 2011,
and the Board has taken his resignation under advisement.