●  COSTCO WHOLESALE CORP /NEW · FY 2021 

Controls & Procedures

Internal control environments demonstrate a high degree of structural stability and operational soundness. Management has consistently concluded that its disclosure controls and internal controls over financial reporting were effective as of August 29, 2021. Notably, the assessment revealed no material weaknesses or significant deficiencies in the company’s framework during the reported period.

COST L1 Synthesis
●  SYMBOLOGY.ONLINE l1 SYNTHESIS 

Costco Wholesale Corp /new Controls & Procedures Synthesis

Summary of Disclosure Controls and Internal Controls over Financial Reporting (ICFR)

Management Conclusions on Control Effectiveness

Management has consistently concluded that both its disclosure controls and internal controls over financial reporting were effective as of August 29, 2021. This represents a significant strength in the company's control environment.

Disclosure Controls and Procedures
  • Conclusion: The Chief Executive Officer and Chief Financial Officer concluded that the disclosure controls and procedures were effective as of August 29, 2021.
  • Purpose: These controls are designed to ensure that required information is recorded, processed, summarized, and communicated to management in a timely manner for decision-making regarding SEC disclosures.
Internal Control Over Financial Reporting (ICFR)
  • Conclusion: Management concluded that the ICFR was effective as of August 29, 2021.
  • Assessment Standard: The assessment utilized the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control-Integrated Framework (2013).
  • External Validation: The effectiveness was subject to attestation by KPMG LLP, the independent registered public accounting firm.

Material Weaknesses and Changes in Controls

The company reported a high degree of stability within its control framework during the reporting period.

Identified Deficiencies
  • No material weaknesses or significant deficiencies were identified in the provided text. Management concluded that controls were effective without noting any specific failures.
Changes to Internal Controls (Noteworthy Stability)
  • Observation: There have been no changes in internal control over financial reporting during the fourth quarter of 2021 that materially affected or are reasonably likely to materially affect the company's ICFR. This indicates a stable and consistent control environment.

Scope, Procedures, and Limitations

The controls are designed to provide reasonable assurance regarding the reliability of financial reporting in accordance with U.S. GAAP.

Key Control Procedures

ICFR policies and procedures cover three main areas:

  1. Record Maintenance: Ensuring records accurately and fairly reflect transactions and asset dispositions.
  2. Authorization and Recording: Providing reasonable assurance that transactions are recorded correctly and expenditures are made only with appropriate authorizations.
  3. Asset Protection: Offering reasonable assurance regarding the prevention or timely detection of unauthorized acquisition, use, or disposition of assets.
Inherent Limitations (Standard Acknowledgment)
  • The company acknowledges the inherent limitations of ICFR, noting that controls may not prevent or detect all misstatements due to changes in conditions or deterioration in compliance with established policies and procedures.