ACG 4651 General Motors This work is about audit class, we need to select on company (General Motors) and answer the questions attached below. They are 4 q

ACG 4651 General Motors This work is about audit class, we need to select on company (General Motors) and answer the questions attached below. They are 4 questions in Case 1 and 6 questions in Case 2 all questions are for the same company. response should not exceed 6 single spaced pages. I attached the Form 10-K to answer the question. Please, read the instructions carefully ACG 4651
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Case 2: SEC Registrant – Part I
Purpose: The primary purpose of this case is to help you become familiar with the content of filings that public
companies (“Registrants”) include in various filings that they make with the Securities and Exchange Commission.
As a public accountant you will need to be very well versed in all accounting and auditing matters since in the eyes
of the SEC, the independent registered public accounting firm is considered “Expert” in accounting and auditing.
Required: To successfully complete this case you will need to search for and analyze various reports and
information contained on the selected Company’s web site and/or on the SEC web site and perhaps, other sites
as well. The financial and proxy information should be from the most recently filed Annual Report on Form 10 K
(which for many companies on the list could be the year ended December 31, 2017) and the Proxy Statement,
which for December 31, 2017 year-end companies was most likely filed in the March to May, 2018 timeframe. In
preparing your report, where noted in each question, please set forth the exact source of the information you
cite for each question. (For example – Form 10 K, Item 1, Business). For some questions, you may wish to
include a copy of certain documents as an attachment to your case.
EACH TEAM WILL BE ASSIGNED A SPECIFIC COMPANY – refer to separate spreadsheet
1. Briefly describe (and cite source for each):
a. the company,
b. the location of its corporate headquarters,
c. its business,
d. its area of operations,
e. major products
f. operating segments,
g. major competitors,
2. Describe at least 5 risk factors and the possible impact on the Company if it does not successfully manage
these risks. ( cite source)
a. Why would auditors want to know about their clients’ business-related risks?
3. Describe The Company’s audit committee and its duties. (cite sources for each)
a. Who is the designated financial expert on the audit committee? ( cite source) Does the designation
as only one individual as a financial expert seem adequate for the complexity of The Company and
the requirements of the Sarbanes-Oxley Act?
b. Review the audit committee’s report and describe its primary contents.
c. Describe the Audit Committee Charter
4. Who is the auditor for The Company? ( cite sources for each)
a. What were the fees charged for audit services for each of the last two fiscal years?
b. What were the type and amounts of other fees for services for each of the last two fiscal years?
c. Describe and conclude on the process used by the Audit Committee to determine the independence
of the independent registered public accounting firm.
Formatting: Your response should not exceed 3 single spaced pages (note the increase in page limit).
ACG 4651
1
Case 2: SEC Registrant – Part II
Purpose: The primary purpose of this case is to help you become familiar with the content of filings that public
companies (“Registrants”) include in various filings that they make with the Securities and Exchange Commission.
As a public accountant you’ll need to be very well versed in all accounting and auditing matters since in the eyes
of the SEC, the independent registered public accounting firm is considered “Expert” in accounting and auditing.
Required: To successfully complete this case you will need to search for and analyze various reports and
information contained on the selected Company’s web site and/or on the SEC web site and perhaps, other sites
as well. The financial and proxy information should be from the most recently filed Annual Report on Form 10 K
(which for many companies on the list could be the year ended December 31, 2014) and the Proxy Statement,
which for December 31, 2014 year- end companies was most likely filed in the March to May, 2015 timeframe.
In preparing your report, where noted in each question, please set forth the exact source of the information you
cite for each question. (For example – Form 10 K, Item 1, Business). For some questions, you may wish to
include a copy of certain documents as an attachment to your case.
USE THE SAME COMPANY THAT WAS ASSIGNED TO YOUR TEAM IN PART I
1. Name of Company and date of annual report examined.
2. The Sarbanes-Oxley Act of 2002, modified the requirements in the Exchange Act rules such that, effective
starting in 2002, principal executive officers of publicly traded companies must include certain certifications
in the annual report on Form 10K and also in the quarterly reports on Form 10-Q.
a. Name each certification report in the annual report on Form 10K and the section of the Sarbanes
Oxley act that requires it
b. Specify the name and title of the executive officer who signed each of the certification reports
included in the annual report on Form 10K. ( cite source for each)
c. Why do you think Congress felt that it was necessary to require executive officers to make
affirmative claims such as these reports and certifications?
3. What are related party transactions?
a. Why do related party transactions pose a risk to audit firms?
b. Read about the related parties at The Company. Are there any situations that cause you particular
concern?
4. Read management’s report on internal control ( cite source)
a. What did management conclude about the effectiveness of its internal controls?
b. What basis did management use to make that assessment?
c. Did the auditors agree with management’s assessment of the effectiveness of its internal controls?
d. Does the Company have any comments made by the staff of the SEC that were unresolved when its
latest Form 10K was filed?
5. Read the report of the independent registered public accounting firm for The Company. Notice that the
report clearly articulates differential responsibilities on the part of management versus the audit firm.
a. Why is it important that the audit firm articulate these responsibilities in this way?
b. Name the independent registered public accounting firm
c. What type of opinion did the independent registered public accounting firm render on the latest
financial statements?
ACG 4651
d. Were there any modifications to the report of the independent registered public accounting firm. If
so, describe the modification and the reason for it
6. Based on your research and readings about the Company state and explain your conclusion about whether
the independent registered public accounting firm should continue to serve as the auditor for the Company.
Formatting: Your response should not exceed 3 single spaced pages (note the increase in page limit).
2
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549-1004
Form 10-K
þ
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2017
OR
¨
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from
to
Commission file number 001-34960
GENERAL MOTORS COMPANY
(Exact name of registrant as specified in its charter)
STATE OF DELAWARE
27-0756180
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
300 Renaissance Center, Detroit, Michigan
48265-3000
(Address of principal executive offices)
(Zip Code)
Registrant’s telephone number, including area code
(313) 667-1500
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Name of each exchange on which registered
Common Stock
New York Stock Exchange
Warrants (expiring July 10, 2019)
New York Stock Exchange
Securities registered pursuant to Section 12 (g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes þ No ¨
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ¨ No þ
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No ¨
Indicate by check mark whether the registrant has submitted electronically and posted on its company Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation
S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes þ No ¨
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in
definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. þ
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated
filer,” “accelerated filer”, “small reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer þ Accelerated filer ¨ Non-accelerated filer ¨ Smaller reporting company ¨
(Do not check if a smaller reporting company)
Emerging growth company ¨
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to
Section 13(a) of the Exchange Act. ¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨
No þ
The aggregate market value of the voting stock held by non-affiliates of the registrant (assuming only for purposes of this computation that directors and executive officers may be affiliates) was approximately $51.2
billion as of June 30, 2017.
As of January 30, 2018 the number of shares outstanding of common stock was 1,402,630,363 shares.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the registrant’s definitive Proxy Statement related to the Annual Stockholders Meeting to be filed subsequently are incorporated by reference into Part III of this Form 10-K.
INDEX
Page
PART I
Item 1.
Item 1A.
Item 1B.
Item 2.
Item 3.
Item 4.
Item 5.
Item 6.
Item 7.
Item 7A.
Item 8.
Business
Risk Factors
Unresolved Staff Comments
Properties
Legal Proceedings
Mine Safety Disclosures
1
10
16
16
16
16
PART II
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
Selected Financial Data
Management’s Discussion and Analysis of Financial Condition and Results of Operations
Quantitative and Qualitative Disclosures About Market Risk
Financial Statements and Supplementary Data
Consolidated Income Statements
Consolidated Statements of Comprehensive Income
Consolidated Balance Sheets
Consolidated Statements of Cash Flows
Consolidated Statements of Equity
Notes to Consolidated Financial Statements
Note 1.
Nature of Operations and Basis of Presentation
Note 2.
Significant Accounting Policies
Note 3.
Discontinued Operations
Note 4.
Marketable Securities
Note 5.
GM Financial Receivables
Note 6.
Inventories
Note 7.
Equipment on Operating Leases
Note 8.
Equity in Net Assets of Nonconsolidated Affiliates
Note 9.
Property
Note 10.
Acquisition of Business
Note 11.
Goodwill and Intangible Assets
Note 12.
Variable Interest Entities
Note 13.
Accrued and Other Liabilities
Note 14.
Automotive and GM Financial Debt
Note 15.
Derivative Financial Instruments
Note 16.
Pensions and Other Postretirement Benefits
Note 17.
Commitments and Contingencies
Note 18.
Income Taxes
Note 19.
Restructuring and Other Initiatives
Note 20.
Stockholders’ Equity and Noncontrolling Interests
Note 21.
Earnings Per Share
Note 22.
Stock Incentive Plans
Note 23.
Supplementary Quarterly Financial Information (Unaudited)
Note 24.
Segment Reporting
Note 25.
Supplemental Information for the Consolidated Statements of Cash Flows
17
17
18
41
46
46
46
47
48
49
50
50
50
57
59
61
62
62
63
64
65
65
66
66
67
69
70
71
76
79
80
81
81
82
83
86
Page
Item 9.
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
Item 9A.
Item 9B.
Controls and Procedures
Other Information
Item 10.
Item 11.
Item 12.
Item 13.
Item 14.
Item 15.
Item 16.
Signatures
PART III
Directors, Executive Officers and Corporate Governance
Executive Compensation
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
Certain Relationships and Related Transactions and Director Independence
Principal Accountant Fees and Services
PART IV
Exhibits
Form 10-K Summary
86
86
87
88
88
88
88
88
89
91
92
Table of Contents
GENERAL MOTORS COMPANY AND SUBSIDIARIES
PART I
Item 1. Business
General Motors Company (sometimes referred to as we, our, us, ourselves, the Company, General Motors, or GM) was incorporated as a Delaware
corporation in 2009. We design, build and sell cars, trucks, crossovers and automobile parts worldwide. We also provide automotive financing services
through General Motors Financial Company, Inc. (GM Financial). Except for per share amounts or as otherwise specified, amounts presented within tables are
stated in millions.
On July 31, 2017 we closed the sale of the Opel and Vauxhall businesses and certain other assets in Europe (the Opel/Vauxhall Business) to Peugeot, S.A.
(PSA Group). On October 31, 2017 we closed the sale of the European financing subsidiaries and branches (the Fincos, and together with the Opel/Vauxhall
Business, the European Business) to Banque PSA Finance S.A. and BNP Paribas Personal Finance S.A. The European Business was previously reported as our
GM Europe (GME) segment and part of GM Financial. The European Business is presented as discontinued operations in our consolidated financial
statements for all periods presented. The assets and liabilities of the European Business are presented as held for sale in our consolidated financial statements
as of December 31, 2016. Unless otherwise indicated, information in this report relates to our continuing operations.
Segment Reporting Data During the three months ended December 31, 2017, we changed our automotive segments as a result of changes in our
organizational structure and the evolution of our business resulting from the sale of the Opel/Vauxhall Business and the various strategic actions taken in the
GM International Operations (GMIO) region. As a result, our GM South America (GMSA) and GMIO operating segments are now reported as one, combined
reportable international segment, GM International (GMI). Our GM North America (GMNA) and GM Financial segments were not impacted. All periods
presented have been recast to reflect the changes. Operating segment data and principal geographic area data for the years ended December 31, 2017, 2016
and 2015 are summarized in Note 24 to our consolidated financial statements.
Automotive Our automotive operations meet the demands of our customers through our automotive segments: GMNA and GMI. GMNA meets the demands
of customers in North America with vehicles developed, manufactured and/or marketed under the Buick, Cadillac, Chevrolet and GMC brands. GMI
primarily meets the demands of customers outside North America with vehicles developed, manufactured and/or marketed under the Buick, Cadillac,
Chevrolet, GMC and Holden brands. We also have equity ownership stakes in entities that meet the demands of customers in other countries, primarily in
China, with vehicles developed, manufactured and/or marketed under the Baojun, Buick, Cadillac, Chevrolet, Jiefang and Wuling brands.
In addition to the vehicles we sell through our dealer network to retail customers, we also sell vehicles directly or through our dealer network to fleet
customers, including daily rental car companies, commercial fleet customers, leasing companies and governments. Our customers can obtain a wide range of
aftersale vehicle services and products through our dealer network, such as maintenance, light repairs, collision repairs, vehicle accessories and extended
service warranties.
Competitive Position and Vehicle Sales The principal factors that determine consumer vehicle preferences in the markets in which we operate include
overall vehicle design, price, quality, available options, safety, reliability, fuel economy and functionality. Market leadership in individual countries in
which we compete varies widely.
We present both wholesale and retail vehicle sales data to assist in the analysis of our revenue and our market share. Wholesale vehicle sales data, which
represents sales directly to dealers and others, including sales to fleet customers, is the measure that correlates to our revenue from the sale of vehicles, which
is the largest component of Automotive net sales and revenue. Wholesale vehicle sales exclude vehicles sold by joint ventures. In the year ended December
31, 2017 39% of our wholesale vehicle sales volume was generated outside the U.S. The following table summarizes total wholesale vehicle sales of new
vehicles by automotive segment (vehicles in thousands):
Years Ended December 31,
2017
GMNA(a)
GMI(b)
Total
Discontinued operations
2016
2015
3,511
1,267
73.5%
26.5%
3,958
1,255
75.9%
24.1%
3,558
1,372
72.2%
27.8%
4,778
100.0%
5,213
100.0%
4,930
100.0%
696
1,199
__________
(a) Wholesale vehicle sales related to transactions with the European Business were insignificant for the years ended December 31, 2017, 2016 and 2015.
1
1,140
Table of Contents
GENERAL MOTORS COMPANY AND SUBSIDIARIES
(b) Wholesale vehicle sales include 131, 128 and 181 vehicles related to the transactions with the European Business for the years ended December 31, 2017, 2016 and 2015.
Retail vehicle sales data, which represents sales to end customers based upon the good faith estimates of management, including sales to fleet customers,
does not correlate directly to the revenue we recognize during the period. However retail vehicle sales data is indicative of the underlying demand for our
vehicles. Market share information is based primarily on retail vehicle sales volume. In countries where retail vehicle sales data is not readily available, other
data sources such as wholesale or forecast volumes are used to estimate retail vehicle sales to end customers.
Retail vehicle sales data includes all sales by joint ventures on a total vehicle basis, not based on the percentage of ownership in the joint venture. Certain
joint venture agreements in China allow for the contractual right to report vehicle sales of non-GM trademarked vehicles by those joint ventures. Retail
vehicle sales data includes vehicles used by dealers under courtesy transportation programs and vehicles sold through the dealer registration channel,
primarily in Europe. This sales channel consists primarily of dealer demonstrator, loaner and self-registered vehicles which are not eligible to be sold as new
vehicles after being registered by dealers. Certain fleet sales that are accounted for as operating leases are included in retail vehicle sales at the time of
delivery to daily rental car companies. The following table summarizes total industry retail sales, or estimated sales where retail sales volume is not available,
of vehicles and our related competitive position by geographic region (vehicles in thousands):
Years Ended December 31,
2017
Industry
GM
2016
Market
Share
Industry
GM
2015
Market
Share
Industry
GM
Market
Share
North America
United States
Other
17,567
3,981
3,002
574
17.1%
14.4%
17,886
3,993
3,043
587
17.0%
14.7%
17,…
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