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 accompanying sections of this memo. Fist will be a comparison of income information with that of competition, especially Yahoo and Microsoft.The encourage measure to be investigated is that of compensation of company executives victimization hold options. Third measure will command the connection between senior management and bill of directors, whereas the fourth measure intends to answer the question whether the companys neckcloth is everyplacevalued.Google is the youngest of the terce major Internet search engine and online communication providers. However, this new entrant to the industry is quick becoming a trend setter for its one-time(a) rivals. the same is happening with net income, although it may bugger off few more stratums before Google reaches Microsofts multione thousand thousand one dollar bill profits.According to EDGAR reports by the Securities and Exchange Commission (SEC), Googles 2007 profits stood at $ 4.2 billion compargond to 3.1 billion in 2006 and 1.5 billion in 2005.As this report indicates, the companys profits have been arise steady since it was listed at the NYSE. The profitability is echoed by the ever lift popularity of Googles products. In the same period, Yahoos profits stood at 800 one thousand thousand in 2005, 1.9 billion in 2006 and 750 million in 2005.Yahoos profits have been cyclical despite the cost increase usage of Internet worldwide. Microsoft, the other market player 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 Googles profitability has been on rising streak compared to its competitors. The continuation of this trend, buoyed by ever increase petition for company products and services. Having illustrated profitability between Google and its competitors, the subsequent sec tions of the memo shall address investigates probability fraud in the company.With regard to the non financial measures, Google has been steadily change magnitude the get along of employees to cater for the increasing demand for its products and services. Considering Google is a produce 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 companys balance saddlerythe expenses rose from 266 million in 2006 to 2007 million in 2007. Microsofts employee compensation expense increased from $ 1.9 billion in 2006 to $2.3 in 2007. The doubling of Googles employee compensation is due to the item 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 labor movement force has been paying off in two short and long run liveliness of the company. In addition to the reg ular salaries provided to employees, some members of the labour force, especially executives and members of the notice of directors benefit from be equilibrize through stock options. In the 2007 financial year of $ 137.2 million stock options were exercised by respective employees and control panel members.At the same period, Yahoos stock options were valued at $ 108 million and that of Microsoft at $ 819 million. Microsofts considerable amount is occasioned by the large size of the company, which means that there is a great number of employees taking part. As for Google, the number is in no way showing fraud indications, compared to the rest.Most of Googles 1998 founders are still very much involved in the day to day running of company activities. Indeed, a good number of them serve in both executive positions and at the board of directors. For instance, Eric Scmidt has for long proceed to serve as the Chief Executive ships officer and Chairman of the companys jury of Dire ctor he has busy both positions since 2001.The same happens with Sergy Brin who serves the executive position of technology death chair and as member in the board of directors. The other founder is Larry Page who serves as President of Products and as a member in the Board of Directors.This is a far shift from the practice in rest of Googles competitors none between Microsofts and Yahoos executives serve in the Board of Directors. In this regard, Google executives are more presumable to participate in fraud compared to those of Microsoft and Yahoo.Last is the measure on whether Googles shares are overvalued in the stock market. As of Friday, June 6, 2008, Googles stock was trading at $ 567, compared to Yahoos $ 26 and Microsofts $ 27. 49.The higher monetary value paid on company stock develops from circumstance that Google is poised to in crease its dominance in the industry and thus led to better have on investment. this is an indication the stock is not over valued at all. In vestors are therefore yearning and willing to make a bet on Googles shares. Considering the analysis above, it is hereby observer that Google far from being prone to internal fraud.Works CitedSEC. Securities Fillings and Forms. Securities and Exchange Commission. 8 June, 2008,