Ms. Connie McDaniel, VP and Controller
of the Coca-Cola Company,
Addresses Attendees at the
2001 Annual Meeting Auditing Luncheon

Ms. Connie McDaniel, Vice President and Controller of the Coca-Cola Company, spoke at the Auditing Section luncheon on Monday, August 13th at the AAA Annual Meeting in Atlanta. McDaniel joined Coca-Cola in 1989 after spending the previous 10 years with Ernst & Young in Atlanta. Her luncheon speech focused on two areas: Coca-Cola’s audit committee report and its SAP implementation.

First, McDaniel discussed Coca-Cola’s first proxy-based audit committee report. She emphasized that Coca-Cola’s report focuses on what the audit committee does and does not do using a “plain language approach” that should be understandable to the company’s varied stakeholders. McDaniel also emphasized certain highlights of the report, including the audit committee’s reliance on management and the external auditor. Finally, she highlighted the three primary questions that the audit committee asks of the external auditor:

1. Are there any significant accounting judgments made by management in preparing the financial statements that would have been made differently had the auditors themselves prepared and been responsible for the financial statements?
2. Based on the auditors’ experience, and their knowledge of the Company, do the Company’s financial statements fairly present to investors, with clarity and completeness, the Company’s financial position and performance for the reporting period in accordance with GAAP and SEC disclosure requirements?
3. Based on the auditors’ experience, and their knowledge of the Company, has the Company implemented internal controls and internal audit procedures that are appropriate for the Company?

After her comments on Coca-Cola’s audit committee report, Ms. McDaniel shifted to an overview of the company’s SAP implementation. Since first implementation in 1999, she emphasized the ongoing challenge of matching global integration using ERP software with global security. At Coca-Cola, SAP implementation has eliminated much of the gap between IS auditors and financial auditors, forcing cooperation and teamwork between groups. The goal is to move toward a more centralized audit function that can take advantage of the efficiencies of one integrated system.

Ms. McDaniel also emphasized that hiring priorities at Coca-Cola have shifted somewhat with the SAP transition. While staffing numbers should remain stable, SAP experience is considered a major plus when making hiring decisions, although McDaniel acknowledged that “fast learners are okay.” Core training is typically person-to-person, although some e-learning tools are used. Finally, Ms. McDaniel indicated that Coca-Cola is not using SAP to account for FAS 133 (derivatives) adjustments; instead they still use a “low tech” Excel-based approach.

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