315:312020-Target-Annual-...TARGET CORPORATION2020 Form 10-KFINANCIAL STATEMENTSREPORTS. 5G 55Table of ContentsIndex to Financial StatementsReport of Management on the Consolidated Financial StatementsManagement is responsible for the consistency, integrity, and presentation of the information in the Annual Report. The consolidated financialstatements and other information presented in this Annual Report have been prepared in accordance with accounting principles generallyaccepted in the United States and include necessary judgments and estimates by management.To fulfill our responsibility, we maintain comprehensive systems of internal control designed to provide reasonable assurance that assets aresafeguarded and transactions are executed in accordance with established procedures. The concept of reasonable assurance is based uponrecognition that the cost of the controls should not exceed the benefit derived. We believe our systems of internal control provide this reasonableassurance.The Board of Directors exercised its oversight role with respect to the Corporation's systems of internal control primarily through its AuditCommittee, which is comprised of independent directors. The Committee oversees the Corporation's systems of internal control, accountingpractices, financial reporting and audits to assess whether their quality, integrity, and objectivity are sufficient to protect shareholders'investments.In addition, our consolidated financial statements have been audited by Ernst & Young LLP, independent registered public accounting firm, whosereport also appears on this page.Brian C. CornellChairman and Chief Executive OfficerМой в большиMichael J. FiddelkeExecutive Vice President andChief Financial OfficerMarch 10, 2021Report of Independent Registered Public Accounting FirmTo the Shareholders and the Board of Directors ofTarget CorporationOpinion on the Financial StatementsWe have audited the accompanying consolidated statements of financial position of Target Corporation (the Corporation) as of January 30, 2021and February 1, 2020, the related consolidated statements of operations, comprehensive income, cash flows and shareholders' investment foreach of the three years in the period ended January 30, 2021, and the related notes (collectively referred to as the "consolidated financialstatements"). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Corporation.at January 30, 2021 and February 1, 2020, and the results of its operations and its cash flows for each of the three years in the period endedJanuary 30, 2021, in conformity with U.S. generally accepted accounting principles.We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), theCorporation's internal control over financial reporting as of January 30, 2021, based on criteria established in Internal Control-IntegratedFramework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated March10, 2021 expressed an unqualified opinion thereon.Basis for OpinionThese financial statements are the responsibility of the Corporation's management. Our responsibility is to express an opinion on theCorporation's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to beindependent with respect to the Corporation in accordance with the U.S. federal securities laws and the applicable rules and regulations of theSecurities and Exchange Commission and the PCAOB.We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtainreasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our auditsincluded performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, andperforming procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts anddisclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made bymanagement, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis forour opinion.Critical Audit MattersThe critical audit matters communicated below are matters arising from the current period audit of the financial statements that werecommunicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to thefinancial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of critical audit mattersdoes not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the criticalaudit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.Description ofthe MatterTARGET CORPORATION2020 Form 10-KFINANCIAL STATEMENTSREPORTS32Table of ContentsIndex to Financial StatementsValuation of Inventory and related Cost of SalesAt January 30, 2021, the Corporation's inventory was $10,653 million. As described in Note 9 to the consolidated financialstatements, the Corporation accounts for the vast majority of its inventory under the retail inventory accounting method (RIM)using the last-in, first-out (LIFO) method. RIM is an averaging method that has been widely used in the retail industry due to itspracticality. Under RIM, inventory cost and the resulting gross margins are calculated by applying a cost-to-retail ratio to theinventory retail value.Auditing inventory requires extensive audit effort including significant involvement of more experienced audit team members,including the involvement of our information technology (IT) professionals, given the relatively higher level of automationimpacting the inventory process including the involvement of multiple information systems used to capture the high volume oftransactions processed by the Corporation. Further, the inventory process is supported by a number of automated and ITDashboardCalendarTo DoNotificationsInbox

Question

315:312020-Target-Annual-...TARGET CORPORATION2020 Form 10-KFINANCIAL STATEMENTSREPORTS. 5G 55Table of ContentsIndex to Financial StatementsReport of Management on the Consolidated Financial StatementsManagement is responsible for the consistency, integrity, and presentation of the information in the Annual Report. The consolidated financialstatements and other information presented in this Annual Report have been prepared in accordance with accounting principles generallyaccepted in the United States and include necessary judgments and estimates by management.To fulfill our responsibility, we maintain comprehensive systems of internal control designed to provide reasonable assurance that assets aresafeguarded and transactions are executed in accordance with established procedures. The concept of reasonable assurance is based uponrecognition that the cost of the controls should not exceed the benefit derived. We believe our systems of internal control provide this reasonableassurance.The Board of Directors exercised its oversight role with respect to the Corporation's systems of internal control primarily through its AuditCommittee, which is comprised of independent directors. The Committee oversees the Corporation's systems of internal control, accountingpractices, financial reporting and audits to assess whether their quality, integrity, and objectivity are sufficient to protect shareholders'investments.In addition, our consolidated financial statements have been audited by Ernst & Young LLP, independent registered public accounting firm, whosereport also appears on this page.Brian C. CornellChairman and Chief Executive OfficerМой в большиMichael J. FiddelkeExecutive Vice President andChief Financial OfficerMarch 10, 2021Report of Independent Registered Public Accounting FirmTo the Shareholders and the Board of Directors ofTarget CorporationOpinion on the Financial StatementsWe have audited the accompanying consolidated statements of financial position of Target Corporation (the Corporation) as of January 30, 2021and February 1, 2020, the related consolidated statements of operations, comprehensive income, cash flows and shareholders' investment foreach of the three years in the period ended January 30, 2021, and the related notes (collectively referred to as the &#34;consolidated financialstatements&#34;). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Corporation.at January 30, 2021 and February 1, 2020, and the results of its operations and its cash flows for each of the three years in the period endedJanuary 30, 2021, in conformity with U.S. generally accepted accounting principles.We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), theCorporation's internal control over financial reporting as of January 30, 2021, based on criteria established in Internal Control-IntegratedFramework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated March10, 2021 expressed an unqualified opinion thereon.Basis for OpinionThese financial statements are the responsibility of the Corporation's management. Our responsibility is to express an opinion on theCorporation's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to beindependent with respect to the Corporation in accordance with the U.S. federal securities laws and the applicable rules and regulations of theSecurities and Exchange Commission and the PCAOB.We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtainreasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our auditsincluded performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, andperforming procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts anddisclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made bymanagement, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis forour opinion.Critical Audit MattersThe critical audit matters communicated below are matters arising from the current period audit of the financial statements that werecommunicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to thefinancial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of critical audit mattersdoes not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the criticalaudit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.Description ofthe MatterTARGET CORPORATION2020 Form 10-KFINANCIAL STATEMENTSREPORTS32Table of ContentsIndex to Financial StatementsValuation of Inventory and related Cost of SalesAt January 30, 2021, the Corporation's inventory was $10,653 million. As described in Note 9 to the consolidated financialstatements, the Corporation accounts for the vast majority of its inventory under the retail inventory accounting method (RIM)using the last-in, first-out (LIFO) method. RIM is an averaging method that has been widely used in the retail industry due to itspracticality. Under RIM, inventory cost and the resulting gross margins are calculated by applying a cost-to-retail ratio to theinventory retail value.Auditing inventory requires extensive audit effort including significant involvement of more experienced audit team members,including the involvement of our information technology (IT) professionals, given the relatively higher level of automationimpacting the inventory process including the involvement of multiple information systems used to capture the high volume oftransactions processed by the Corporation. Further, the inventory process is supported by a number of automated and ITDashboardCalendarTo DoNotificationsInbox

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Part 1: Answer:The provided text appears to be an excerpt from a report or financial statement,…