Question

Consider and discuss the specific risks and nature of the company (Apple) you will be auditing and create comprehensive work programs for the Acquisition, Payment, Property Plant, and Equipment (Fixed Assets), Notes Payable and Owner's Equity accounts and cycles.

What I need is what is Apple's sample size sample methodology as company in 2018.

Answer 1

Company Background

Established in 1977 in California, Apple Inc. is a global designer, manufacturer and marketer of mobile communication and media devices, personal computers, and portable digital music players.The Company designs, manufactures, and markets mobile communication and media devices, personal computers, and portable digital music players, and sells a variety of related software, services, accessories, networking solutions, and third-party digital content and applications. The Company’s products and services include iPhone ® , iPad ® , Mac ® , iPod ® , Apple TV ® , a portfolio of consumer and professional software applications, the iOS and OS X ® operating systems, iCloud ® , and a variety of accessory, service and support offerings. The Company also sells and delivers digital content and applications through the iTunes Store ® , App Store™, iBooks Store™ and Mac App Store. The Company sells its products worldwide through its retail stores, online stores and direct sales force, as well as through third-party cellular network carriers, wholesalers, retailers and value-added resellers. In addition, the Company sells a variety of third-party iPhone, iPad, Mac and iPod compatible products, including application software, and various accessories, through its online and retail store.

The preparation of financial statements and related disclosures in conformity with U.S. generally accepted accounting principles (“GAAP”) and the Company’s discussion and analysis of its financial condition and operating results require the Company’s management to make judgments, assumptions and estimates that affect the amounts reported in its consolidated financial statements and accompanying notes. Note 1, “Summary of Significant Accounting Policies” of the Notes to Consolidated Financial Statements in Part II, Item 8 of this Form 10-K describes the significant accounting policies and methods used in the preparation of the Company’s consolidated financial statements. Management bases its estimates on historical experience and on various other assumptions it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results may differ from these estimates and such differences may be material.

Apple pursues product differentiation and premium pricing business strategies. The company is also engaged in acquisition of related businesses. In 2014 Apple completed various business acquisitions, including the acquisitions of Beats Music, LLC, which offers a subscription streaming music service, and Beats Electronics, LLC, which makes Beats headphones, speakers and audio software.

Apple’s services business is largely tied to its active device user base and service revenues are likely to be correlated to hardware sales in recent quarters. For instance, customers often buy the AppleCare plan at the time of their device purchase while potentially loading up more paid Apps earlier in the life cycle of their product.

The increasing proliferation of cloud-based services is also likely to be undermining Apple’s historical service ecosystem advantage. There are compelling cross-platform alternatives to most of Apple’s service applications ranging from streaming music (Spotify), messaging (Whatsapp, Wechat) to cloud storage (Dropbox, Google Photos).