Accounting Memo

Name

University

Course

Tutor

Date

SAS 99 Memo for Google

Contained herein is the SAS 99 for Google (GOOG . Several measures of internal fraud in the company will be discussed in subsequent sections of this memo . Fist will be a comparison of income information with that of competition , especially Yahoo and Microsoft . The second measure to be investigated is that of compensation of company executives using stock options . Third measure will involve the connection between senior management and board of directors , whereas the fourth measure intends to

answer the question whether the company 's stock is overvalued

Google is the youngest of the three major Internet search engine and online communication providers . However , this new entrant to the industry is rapidly becoming a trend setter for its older rivals . the same is happening with net income , although it may take few more years before Google reaches Microsoft 's multimillion dollar profits . According to EDGAR reports by the Securities and Exchange Commission (SEC Google 's 2007 profits stood at 4 .2 billion compared to 3 .1 billion in 2006 and 1 .5 billion in 2005 . As this report indicates , the company 's profits have been rising steadily since it was listed at the NYSE . The profitability is echoed by the ever rising popularity of Google 's products . In the same period , Yahoo 's profits stood at 800 million in 2005 , 1 .9 billion in 2006 and 750 million in 2005 . Yahoo 's profits have been cyclical despite the rising usage of Internet worldwide . Microsoft the other market participant that competes with Google and Yahoo made 12 .2 billion in 2005 , 12 .6 billion in 2006 and 10 billion in 2007 . From the three companies , it is clear that only Google 's profitability has been on rising streak compared to its competitors . The continuation of this trend , buoyed by ever increasing demand for company products and services . Having illustrated profitability between Google and its competitors , the subsequent sections of the memo shall address investigates probability fraud in the company

With regard to the non financial measures , Google has been steadily increasing the number of employees to cater for the increasing demand for its products and services . Considering Google is a growth company it has been undertaking aggressive development of new products , which increases the demand for more employees . This explains the rising employee expenses in the company 's balance sheet - the expenses rose from 266 million in 2006 to 2007 million in 2007 . Microsoft 's employee compensation expense increased from 1 .9 billion in 2006 to 2 .3 in 2007 . The doubling of Google 's employee compensation is due to the fact that the company on its growth stage whereas Microsoft seems to be reaching maturity stage . Compared with profitability of the company , it is clear that increasing labour force has been paying off in both short and long run life of the company . In addition to the regular salaries provided to employees , some members of the labour force , especially executives and...