Finance 3/70

According to Kimberly Amadeo, understanding the financial market can be a bit challenging at first, simply because it has many terms, including capital markets, Wall Street, even the markets. Some experts even simply refer to it as the stock market, even though they are referring to stocks, bonds and commodities (About.com, 2012). After researching exactly how financial markets operate in the United States, one can conclude that a financial market is basically any type financial transaction that ultimately helps the growth of a business. Here in the U.S., ownership of a public corporation is also considered stocks, which are sold to investors for the company to raise additional capital. Investors gain revenue when company earnings increase which in-return keeps the U.S. growing.

Many people would consider the Dow (Down Jones Industrial Average) as the stock market; and not realizing that there are other components, such as the Dow Utilities Average as well as Dow Transportation Average. “Many investors ignore the Dow, and instead focus on the S&P 500 or other indices to track the progress of the stock market. The stocks that make up these averages are traded on the world's stock exchanges, two of which include the New York Stock Exchange and the NASDAQ”. (Amadeo, K, 2012).

The process that Microsoft uses for complying with the Sec starts with its Audit committee. This committee functions from a charter that has been written by the Boards of Directors. Including within this charter is basically an outline of the duties each member in the committee are responsible for. Members of the committee are required to help assist Bored Members with the audit, including areas of financial and accounting company reports.

It is the responsibility of the Audit Committee to assist the Board in fulfilling its responsibilities by overseeing the accounting and financial reporting process of Microsoft. “Audits of Microsoft’s consolidated financial statements and...