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Quarterly Review of Accounting Policy Issues

• Discuss with management the company’s selection, application and disclosure of its “critical” accounting policies;
• Discuss significant estimates and judgments made by management in choosing and applying its accounting policies;
• Discuss with management and the independent auditors the quality, not just the acceptability, of the accounting principles used by management, including alternative accounting methods within GAAP;
• Discuss with management and the independent auditors the likelihood that materially different amounts would be reported under different conditions or using different assumptions in applying the company’s accounting policies;
• Consider how management’s accounting choices affect the consistency, clarity and completeness of the financial statements and related disclosures;
• Consider how the company’s accounting principles differ from industry norms;
• Discuss with management any new accounting policies or proposed changes in accounting policies;
• Examine accounting policies relating to the timing of transactions and the period in which they are recorded;
• Inquire about and analyze any changes in the way items are accounted for;
• Question the guidelines management uses to determine what is and is not material;
• Study items deemed “immaterial” and understand why this is so;
• Discuss other significant or unusual accounting matters, such as:

- the company’s revenue recognition policies and compliance with relevant accounting standards and best practices, and any trends that are affecting the company’s recognition of revenue (such as an increase in period end shipments, changes in the mix of sales by distribution channel or type of customer and changes in the mix of products and services);

- restructuring charges;

- the use of reserves and accruals

- the effect of acquisitions and dispositions on revenues and earnings;

- impairment assessments for inventory, goodwill and other long-lived and intangible assets;

- contingent liabilities;

- accounting for marketable debt and equity securities;

• Discuss with management any second opinions it has sought from other outside auditors;

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