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Working Capital And Financial Environment Paper

1321 words - 6 pages

Working capital is the (current) assets and liabilities of a business enterprise that can be applied to its operation. Wal-Mart and Target stores share the same working capital for the fiscal year 2007. For January 2007 and August 2007 both Wal-Mart and Target have current assets of accounts receivable, inventory and cash. Inventory is defined as a list of items that are currently in stock. Accounts receivable, in Wal-Mart and Target stores perspective, are monies received for merchandise sold. In addition cash is a current asset and can also be seen as monies received from the merchandise and services provided by Wal-Mart and Target.Current liabilities for Wal-Mart and Target are accounts ...view middle of the document...

Computershare provides dividend reinvestment and direct stock purchases for Wal-Mart (Wal-Mart, 2007).Financial regulations are forms of regulation and supervision over financial systems of a company. This can include enforce laws, investigating claims, minimizing financial loss, and/or maintaining confidence in a financial system. Examples of Target and Wal-Mart's financial regulatory bodies include the SEC, COSO, and the PCAOB. The SEC protects investors, maintains efficient markets, and facilitates capital formation (SEC, 2007). The COSO is a private sector company that studies fraudulent financial reporting and makes recommendations for companies and auditors for the SEC, regulators, and for educational institutions (COSO, 2007). The PCAOBUS is a private sector company that was created by the Sarbanes-Oxley Act of 2002 to handle auditors of companies in order to protect interests of investors and the publics for audit reports (PCAOBUS, 2007).Control ProgramsThe importance of control programs and effective internal control techniques are made clear in the business conduct guide for Target and in Wal-Mart's proxy statement. Wal-Mart gives specific guidelines of an eligible person who can be part of the auditing committee according the New York Stock Exchange Definitions. The duties of the auditing committee are also outlined. Wal-Mart has implemented the strategy of segregation of duties which separates the responsibilities of account keeping amongst different departments in different phases (Albrecht et al, 2005). Wal-Mart also provides the name and qualifications of the company's current Executive Vice President, Finance and Treasurer, Charles M. Holley, Jr. (Wal-Mart Facts, 2007).Target also uses an auditing committee and a segregation of duties (Albrecht et al, 2005). Target describes the importance of maintaining accurate books, records and accounts in order to ensure accounting objectives are met and the financial integrity of the company is upheld. Target discusses in the business conduct guide their commitment to comply with all laws and regulations. Target promises to give accurate reports to the Securities and Exchange Commission and to the New York Stock Exchange.Sarbanes-Oxley ActThe 2002 Sarbanes-Oxley Act requires, among other things, that every company's annual report contain an "internal control report," which must state the responsibility of management for establishing and maintaining an adequate internal control structure and procedures for financial reporting and contain an assessment of the effectiveness of the internal control structure. In the wake of illegal political campaign contributions, business frauds, and numerous illegal payments to foreign officials in exchange for business favors. These acts were needed because of companies falsifying records and were not accurate financial records.The impact of the 2002 Sarbanes-Oxley Act was most felt by the Wal-Mart Company. In October of 2006, Wal-Mart violated Pennsylvania...

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