Because of the inherent limitations of internal

Info icon This preview shows pages 36–38. Sign up to view the full content.

View Full Document Right Arrow Icon
Because of the inherent limitations of internal control over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may not be prevented or detected on a timely basis. Also, projections of any evaluation of the effectiveness of the internal control over financial reporting to future periods are subject to the risk that the controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Berkshire Hathaway Inc. and subsidiaries as of December 31, 2010 and 2009, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2010, in conformity with accounting principles generally accepted in the United States of America. Also, in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31,2010, based on the criteria established in Internal Control- Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. DELOITTE & TOUCHE LLP Omaha, Nebraska February 25, 2011
Image of page 36

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Module 1 I Framework for Analysis and Valuation 1-30 subsequently uncovered. The word material is used inthe sense that an item must be of sufficient magnitude to change the perceptions or decisions of the financial statement user (such as a decision to purchase stock or extend credit). The requirement of auditor independence is the cornerstone of effective auditing and is subject to debate because the company pays the auditor's fees. Regulators have questioned the perceived lack of independence of diting firms and the degree to which declining independence compromises the ability of auditing firms to chal- nge a client's dubious accounting. The Sarbanes-Oxley Act contained several provisions designed to encourage auditor independence: 1. It established the Public Company Accounting Oversight Board (PCAOB) to oversee the development of audit standards and to monitor the effectiveness of auditors, 2. It prohibits auditors from offering certain types of consulting services, and requires audit partners to rotate clients every five years, and 3. It requires audit committees to consist of independent members. Audit Committee Law requires each publicly traded company to have a board of directors, where stockholders elect each director. This board represents the company owners and oversees management. The board also hires the company's execu- - re management and regularly reviews company operations. The board of directors usually establishes several subcommittees to focus on particular governance tasks such compensation, strategic plans, and financial management. Governance committees are commonplace. One of ~ e, the audit committee, oversees the financial accounting system. Exhibit 1.11 illustrates a typical organization -a company's governance structure.
Image of page 37
Image of page 38
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern