Competition Bikes, Inc. makes bicycles for professional and other highly accomplished riders who compete in bike races, biathlons, and triathlons. Sixty percent of all race winners have been victorious using a Competition Bikes, Inc. bicycle when at least ten percent of the entrants were also using a Competition Bikes, Inc. bicycle. This extraordinary success rate consistently is a topic of conversation among racers and this word of mouth advertising has been effective in promoting sales. The company also uses these statistics to promote sales, although its advertising efforts have been quite limited.
The Main Competitor
Two Wheel Racing, Inc. is the only other manufacturer that offers a competitive product in …show more content…
Competition Bikes, Inc. is required to conduct an annual audit since the company shares are traded on the Philadelphia Stock Exchange. The following excerpt was printed in the last annual report issued by the auditors to the shareholders. “A material weakness is a control deficiency, or a combination of control deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely basis.”
Sarbanes Oxley Compliance
Management is responsible for ensuring the internal control processes prevent material misstatements from being reported in the financial statements. They also must provide a Report on