●  COSTCO WHOLESALE CORP /NEW · FY 2022 

Controls & Procedures

Financial reporting systems remain stable at Costco, with management concluding that both disclosure controls and internal control over financial reporting (ICFR) were effective as of August 28, 2022. The assessment found no material weaknesses or significant deficiencies during the period, indicating consistent reliability in how transactions are recorded and reported. Furthermore, there were no material changes identified to the company's ICFR in the fourth quarter of 2022.

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's Assessment of Control Effectiveness

Management has concluded that both the company’s disclosure controls and procedures, as well as its internal control over financial reporting (ICFR), were effective as of August 28, 2022.

Disclosure Controls and Procedures
  • Design Objective: The controls are designed to ensure that required information is accurately recorded, processed, summarized, and reported within specified timeframes. They also ensure that necessary disclosure information is accumulated and communicated to management (including the CEO and CFO) for timely decision-making regarding disclosures.
  • Conclusion: Management concluded these procedures were effective as of August 28, 2022.
Internal Control Over Financial Reporting (ICFR)
  • Design Objective: ICFR is designed to provide reasonable assurance regarding the reliability of financial reporting and adherence to U.S. GAAP. The controls cover policies related to:
    1. Maintaining accurate records reflecting transactions and asset dispositions.
    2. Ensuring transactions are recorded properly and that receipts/expenditures follow appropriate authorizations.
    3. Preventing or detecting unauthorized acquisition, use, or disposition of assets that could materially affect financial statements.
  • Assessment Criteria: The effectiveness assessment was conducted using the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) Internal Control-Integrated Framework (2013).
  • Conclusion: Management concluded ICFR was effective as of August 28, 2022.

Identified Deficiencies and Changes in Controls

Material Weaknesses or Significant Deficiencies

No material weaknesses or significant deficiencies were identified by management during the reporting period. The document does acknowledge the inherent limitation of ICFR—that it may not prevent or detect all misstatements due to changes in conditions or deterioration of compliance.

Changes and Remediation Efforts
  • Changes: There were no changes reported in internal control over financial reporting that occurred during the fourth quarter of 2022 which materially affected, or are reasonably likely to materially affect, the Company's ICFR.
  • Remediation/New Controls: As no material changes were identified, there is no mention of specific remediation efforts or noteworthy new controls introduced during this period.

Balanced Assessment Summary

The company demonstrates a high degree of control stability and effectiveness based on its self-assessment. The primary strength lies in the consistent conclusion that both disclosure controls and ICFR are effective as of August 28, 2022. A key observation is the stability of the internal control environment, evidenced by the lack of any material changes reported during Q4 2022. The only noted limitation is the standard acknowledgment of inherent risk within the financial reporting process itself.