Starbucks. They do have a pending lawsuit. It states in the notes “On
April 13, 2010, an organization named Council for Education and
Research on Toxics (“Plaintiff”) filed a lawsuit in the Superior Court of
the State of California, County of Los Angeles, against the Company
and certain other defendants who manufacture, package, distribute
or sell brewed coffee. The lawsuit is captioned Council for Education
and Research on Toxics v. Starbucks Corporation, et al. On May 9, 2011,
the Plaintiff filed an additional lawsuit in the Superior Court of the
State of California, County of Los Angeles, against the Company and
additional defendants who manufacture, package, distribute or sell
packaged coffee. The lawsuit is captioned Council for Education and
Research on Toxics v. Brad Barry LLC, et al. Both cases have since been
consolidated and now include nearly eighty defendants, which
constitute the majority of the coffee industry in California. Plaintiff
alleges that the Company and the other defendants failed to provide
warnings for their coffee products of exposure to the chemical
acrylamide as required under California Health and Safety Code
Section 25249.5, the California Safe Drinking Water and Toxic
Enforcement Act of 1986, better known as Proposition 65. Plaintiff
seeks equitable relief, including providing warnings to consumers of
coffee products, as well as civil penalties in the amount of the
statutory maximum of two thousand five hundred dollars per day per
alleged violation of Proposition 65. The Plaintiff asserts that every
consumed cup of coffee, absent a compliant warning, is equivalent to
a violation under Proposition 65.” While it states this in the notes,
Note 14, it does not show this in the statements itself. It also does not
state how many days Starbucks could potential have to by $2,500 for.
One procedure an auditor could use is reading the minutes from
meetings. If the board of directors talked about an uncertain event or
events in their meetings then it should show up in the minutes from
their meetings. The auditor can also look at contracts, and loan and
lease agreements. Tax returns can also be reviewed. If the returns
from previously years have been audited by the IRS, then the auditor
can use their reports in determining if events will impact current or
previous years. The auditor should also confirm guarantees and
letters of credit from the bank, as well as inspect other documents for
guarantees.
Works Cited
(2019). In J. S. William F Messier, Auditing & Assurance Services A
Systematic Approach Seventh Edition. McGraw Hill Education.
Starbucks Corporation. (n.d.). Retrieved from United States Securities
and Exchange Commission:
www.sec.gov/ix?doc=/Archives/edgar/data/829224/00008292242
2000039/sbux-20220703.htm
