Describe The Company’s audit committee and its duties.

The primary purpose of this case is to help you become familiar with the content of filings that public
companies (“Registrants”) make with the Securities and Exchange Commission. As a public accountant
you’ll need to be very well versed in all accounting and auditing matters since in the eyes of the SEC, the
independent registered public accounting firm is considered “Expert” in accounting and auditing.

To successfully complete this case you will need to search for TESLA INC’s filings at www.sec.gov and analyze the most recently filed Annual Report – Form 10 K (which for many companies will most likely be for the year ended December 31, 2019 filing date will be
between January-March 2020) and the Proxy Statement – Form DEF 14A (usually filed between March –
May 2018). In preparing your case please include the exact source of the information for each
question. (For example – Form 10 K, Item 1, page #).

1. Briefly describe the company, the location of its corporate headquarters, its business, and at least three
risk factors along with their possible impact on the Company if it does not successfully manage these
risks. Why would auditors want to know about their clients’ business-related risks?

2. Describe The Company’s audit committee and its duties. Review the audit committee’s report and
describe its primary concerns. Who is the designated financial expert on the audit committee? Does the
designation as only one individual as a financial expert seem adequate for the complexity of The
Company and the requirements of the Sarbanes-Oxley Act? Please explain.

3. Who is the auditor for The Company? What were the fees charged for audit services for each of the last
two fiscal years (2017 and 2018)? What were the type and amounts of other fees for services for each of
the last two fiscal years? Do you believe the non-audit services provided by the auditor might
compromise their independence, or perception of independence? Why?

4. The Sarbanes-Oxley Act of 2002 requires principal executive officers of publicly traded companies to
sign certain certifications in the annual report and also in the quarterly reports. Name each certification
report in the annual report (hint – this might be a separate exhibit under the 10-K filing). What is the
name and title of the executive officer who signed each of the certification reports? Why do you think
Congress felt that it was necessary to require executive officers to sign such certifications?

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