Tyson Foods, Inc. (Tyson) is a publicly traded company listed on the New York Stock Exchange and was formed in 1935 by John W. Tyson.
accounting
Description
UNDERSTANDING THE
ENTITY
1.a/b)
Tyson
Foods, Inc. (Tyson) is a publicly traded company listed on the New York Stock Exchange and was
formed in 1935 by John W. Tyson.
The company was founded during World War II and upon creation, largely
benefited from chicken not being included in foods that were rationed, and
today, has grown its’ operations to include other proteins, and prepared meals.
Tyson is headquartered in Springdale, Arkansas, and operates in the food
industry, particularly the processing of chicken, beef, pork, and other prepared
foods, which are Tyson’s main sources of revenue; Exhibit 1 (NM-1
page 31). Currently, Tyson is one of the largest food companies worldwide and
is a leader in protein manufacturing. The company was incorporated in Delaware,
USA, but has recently expanded its’ international footprint into Thailand, and
other European nations, such as, The Netherlands and the United Kingdom (NM-2).
Tyson also has foreign chicken production operations in China, however most of
Tyson’s operations remain domestic and are concentrated in Arkansas and other
Midwestern states. Tyson currently employs roughly 121,000 people, including
5,000 foreign employees, primarily in China (NM-1 page 6).
Exhibit 1 – Tyson Foods, Inc. Sales: in millions - 2018
|
Beef |
$15,473 |
|
Pork |
$4,879 |
|
Chicken |
$12,044 |
|
Prepared
Foods |
$8,668 |
|
Other |
$305 |
|
Intersegment
Sales |
($1,317) |
|
Total |
$40,052 |
1.c)
Tyson’s most currently filed SEC annual report
was for the year ended September 29, 2018. The annual 10-K financial report was
filed on November 13, 2018, and was audited by PricewaterhouseCoopers LLP (PWC). PWC has been
the independent engaged auditor of Tyson since 2009. The audit report for the fiscal
year ended September 29, 2018, was issued on November 13, 2018, and was given a
standard unqualified opinion (see below):
“In our opinion, the consolidated financial
statements referred to above present fairly, in all material respects, the
financial position of the Company as of September 29, 2018 and September 30, 2017,
and the results of its operations and its cash flows for each of the three
years in the period ended September 29, 2018 in conformity with
accounting principles generally accepted in the United States of America” (NM-1
page 88).
As a user of Tyson’s financial statements,
PWC’s audit report should be interpreted as an assurance that the financial
statements which precede the audit report are accurate, complete, and hold
reasonable assurance that they do not contain material misstatements, as
reviewed and criticized by an independent registered public accounting firm.
1.d)
Not only did PWC audit the financial statements
of Tyson for the year ended September 29, 2018, but the internal controls of
Tyson were also audited. Per Tyson’s September 29, 2018 10-K, the internal
controls were “maintained, in all material respects,
effective internal control over financial reporting as
of September 29, 2018, based on criteria established in Internal
Control - Integrated Framework (2013) issued by the COSO” (NM-1 page 88). The report date for the internal control report was also November
13, 2018.
This maintenance of internal controls, as verified by PWC implies that
Tyson’s management has implemented the proper internal controls in order to safeguard
itself from potential risks and protect its’ assets. From a shareholder’s
prospective, it is comforting to know that Tyson’s management has taken the
necessary actions in order to achieve their desired objectives.
1.e)
Relating to the audit conducted by PWC for September 29, 2018, as
well as the audit of the previous year, September 30, 2017, the fees charged by
the independent registered public accounting firm, PWC, are listed in the Proxy
Statement (Def. Proxy 14A) and are summarized below in Exhibit 2 (NM-3
page 17).
Exhibit 2 – Tyson Foods, Inc. Comparative
Audit Fees, and Other Fees
|
Fiscal Year |
Sep 30, 2017 |
Sep 29, 2018 |
|
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