Reports of Management and Independent Auditors
Management is responsible for
preparing the Company’s financial statements and related information that appears in
this annual report. Management believes that the financial statements fairly reflect the
form and substance of transactions and reasonably present the Company’s financial
condition and results of operations in conformity with generally accepted accounting
principles. Management has included in the Company’s financial statements amounts
that are based on estimates and judgments, which it believes are reasonable under the
circumstances.
The Company maintains a
system of internal accounting policies, procedures, and controls intended to provide
reasonable assurance, at appropriate cost, that transactions are executed in accordance
with Company authorization and are properly recorded and reported in the financial
statements, and that assets are adequately safeguarded.
Deloitte & Touche LLP
audits the Company’s financial statements in accordance with generally accepted
auditing standards and provides an objective, independent review of the Company’s
internal controls and the fairness of its reported financial condition and results of
operations.
The Microsoft Board of
Directors has an Audit Committee composed of nonmanagement Directors. The Committee meets
with financial management, internal auditors, and the independent auditors to review
internal accounting controls and accounting, auditing, and financial reporting matters.
Gregory B. Maffei
Vice President, Finance;
Chief Financial Officer
Independent Auditors'
Reports
To the Board of Directors and
Stockholders of Microsoft Corporation:
We have audited the
accompanying balance sheets of Microsoft Corporation
and subsidiaries as of June 30, 1997 and 1998, and the related statements of income, cash flows, and
stockholders’ equity for each of the three years
ended June 30, 1998. These financial statements are the responsibility of the
Company’s management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in
accordance with generally accepted auditing standards. Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for our opinion.
In our opinion, such
financial statements present fairly, in all material respects, the financial position of
Microsoft Corporation and subsidiaries as of June 30, 1997 and 1998, and the results of
their operations and their cash flows for each of the three years ended June 30, 1998 in
conformity with generally accepted accounting principles.
Deloitte & Touche LLP
Seattle, Washington
July 16, 1998
(August 3, 1998 as to Subsequent Sale Note) |
