Plans to target a new market, unveil a new product, or other company developments are described in the president's letter. For details about company developments, look at the analysis of operations, where fluctuations in sales, income, expenses or taxes are explained. This is a good source for identifying a company's strengths and weaknesses. The New York Stock Exchange requires its listed companies to have audit committees independent of management. However, the National Commission on Fraudulent Financial Reporting recommends that all public companies be required to have audit committees composed entirely of independent directors.
Audit committees oversee the financial reporting process, including the company's internal controls.
Auditing standards require the auditor to report certain matters to the audit committee, including significant deficiencies in internal control, changes in significant accounting policies and audit adjustments that could significantly affect the financial reporting process. In choosing a company to work for, the questions you ask are not much different from those a potential investor might ask. You'll want to know as much as possible about the company's financial position and its growth potential which means expansion and job opportunities. So you will want to study the Financial Highlights, which in summarizing income and expenses, show at a glance how the company's performing. If you are interested in a high-technology industry, you should turn to the item headed Selling General and Administration Costs.