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Apple

- In 2017, international sales accounted for 63% of Apple's total net sales of $229 billion. - Net income was $48.4 billion and cash flow from operating activities was $63.6 billion. - Total assets were $375.3 billion and there were approximately 123,000 full-time employees. - Apple's major products include the iPhone, iPad, Mac, iOS, macOS, watchOS, tvOS, iCloud, Apple Pay, Apple TV, Apple Watch, and iPod Touch.

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36 views

Apple

- In 2017, international sales accounted for 63% of Apple's total net sales of $229 billion. - Net income was $48.4 billion and cash flow from operating activities was $63.6 billion. - Total assets were $375.3 billion and there were approximately 123,000 full-time employees. - Apple's major products include the iPhone, iPad, Mac, iOS, macOS, watchOS, tvOS, iCloud, Apple Pay, Apple TV, Apple Watch, and iPod Touch.

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© © All Rights Reserved
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Download as DOCX, PDF, TXT or read online on Scribd
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Sales - 2017
Domestic and international net sales accounted for 37 % and 63 % respectively of total net
sales ( Apple Form 10 - k , 2017 , p. 5 ) .
Their net sales was $ 229,234 million ( Apple , Form 10 - K , 2017 , p. 7 )
■ Net income - 2017 Net Income was 48,351 million dollars ( Apple , Form 10 - K , 2017 , p.
21 )
■ Cash flow from operating activities - 2017 cash flow was $ 63,598 million ( Apple , Form
10 - K , 2017 p 30 )
■ Total assets - 2017 total assets was $ 375,319 million ( Apple , Form 10 - K , 2017 , p. 21 )
■ Number of employees - As of September 30 , 2017 there were approximately 123,000 full -
time equivalent employees . ( Apple , Form 10 - K , 2017 , p. 7 )

Apple products include the following : ( Apple , Form 10 - K , 2017 , p. 2 - 4 ) o Iphone o


Ipad o Mac o Operating systems ( iOs , macOs , watchOS , tvOS ) o Application Software o i
Cloud o AppleCare o Apple Pay o Apple TV o Apple Watch o i Pod Touch

According to Apple , the company is confronted by " aggressive competition in all areas of its
business " ( Apple , Form 10 - K , 2017 , p.5 ) However , to specify who exactly are their
competitors it depends on which area of business we look at , in the computer manufacturers
sector the competition includes Dell Technologies , Lenovo Group and HP Inc.. In the
Smartphone sector , the competition mainly consist of Samsung
d.Who are Apple's customers?Apple's customers is listed as "consumers, small and mid-sized
businesses and education,enterprise and government customers." (Apple, Form 10-K, 2017,
p. 1)

e. Who are Apple's suppliers?Apple's suppliers of components and manufactures are


outsourced by partners located primarilyin Asia, some in the U.S. and Ireland. The supply
and manufacture of many of their componentsis outsourced through the U.S., Asia, and
Europe. (Apple, Form 10-K, 2017, p. 6)
f. How does Apple market and distribute its products?According to the Apple's 2017 Form
10-K, the company market their products in retail storesthat are located at high-traffic
locations in shopping malls and urban shopping districts. Thecompany uses a variety of
indirect distribution networks, such as third-party cellular networkscarriers, wholesalers and
retails, and value-added resellers. (2017, p. 4)
.What is Apple's basic business strategy (cost leadership or differentiation)?Apple's basic
business strategy that they employ is that of differentiation, being able to leverageits unique
ability to design and develop its own operating systems, hardware and applicationsoftware
they provide to its customers (Apple, Form 10-K, 2017, p. 1).
h.What are critical business processes for Apple given its basic business strategy
(forexample, supply chain management)?As a part of Apple's business strategy, they support
a community of developers of third-partysoftware and hardware that complement the
company's offering. They also continue to expandtheir platform for "the discovery and
delivery of digital content through its Digital Content andServices" allowing customers to
discover and download content through all of their products
i.What accounting information is associated with the critical business processes and howdoes
Apple measure up on that information?The account information associated with critical
business processes are those related to thefollowing "revenue recognition, valuation and
impairment of marketable securities, inventoryvaluation, valuation of manufacturing-related
assets and estimation of purchase commitment
cancellation fees, warranty costs, income taxes, and legal and other contingencies" (Apple,
Form10-K, 2017, p. 33) These are critical to management because they are important to the
portrayalof Apple's financial condition and operating results.j. What accounting methods
does Apple use to report the accounting information associatedwith critical business
processes and what is the risk of material misstatement?Accounting methods Apple use to
report the accounting information associated with criticalbusiness processes is the preparation
of financial statements and related disclosures are inconformity with U.S. GAAP which
requires management to make estimates and assumptionsthat affect the amounts reported in
the consolidated financial statements (Apple, Form 10-K,2017, p. 44)
2. Professional auditing standards provide guidance on the auditor's consideration of
anentity's business risks. What is the auditor's objective for understanding an entity'sbusiness
risks? Why does an auditor not have responsibility to identify or assess allbusiness risks?
Provide some examples of business risks associated with an entity that anauditor should
consider when performing an audit.The auditor's objective for understanding an entity's
business risk is to be able to identify andproperly assess the risks of material misstatement.
The auditor does not have responsibility toidentify or assess all business risk because not all
risks results in material misstatement.Examples of business risks associated with an entity
that an auditor should consider includeshigh degree of complex regulation, concerns and
liquidity issues - loss of significant customers,constraints on the availability of capital and
credit, changes in the industry, changes to supplychain, the expansion of new locations and
changes in key personnel (AU Section 314

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