Apple (AAPL)

Danger areas

• Improper or excessive payments of any of the following:

Consulting fees

Public relations fees

Advertising fees

Legal fees

Agents’ fees

Commissions

Insurance premiums

Other professional fees

Expense reports

Page 14

Employee bonuses or compensation arrangements

Employee loans

Miscellaneous expenses

Nondeductible expenses

Director and officer payments

•                  Questionable payments to agents, consultants, or professionals whose backgrounds have not been adequately investigated, who do not have signed contracts or letters of engagement, or whose association with Apple would be embarrassing if exposed.

•                  Payroll-related expenditures, bonuses, awards, and non-cash gifts given to or by Apple employees without proper approval and adequate documentation.

•                  Payments made in cash.

•                  Checks drawn payable to “Cash” or “Bearer”.

•                  Transfers to or deposits in the bank account of an individual, rather than in the account of the company with which Apple is doing business.

•                  Bank accounts or property titles not in Apple’s name.

•                  Billings made higher or lower than normal prices or fees, at a customer’s request.

•                  Payments made for any purpose other than that described in supporting documents.

•                  Payments made to employees of customers or agencies through intermediary persons or organizations, or that seem to deviate from normal business transactions.

•                  Any large, abnormal, unexplained or individually approved contracts or expenditures made without review of supporting documentation.  Specific attention should also be given to large individual gifts.

•                  Unusual transactions occurring with nonfunctional, inactive, or shell subsidiaries.

•                  Undisclosed or unrecorded assets or liabilities.

•                  Use of unethical or questionable means to obtain information, including information about competitors or information about government acquisition plans, procurement decisions, or actions.

•                  An employment, consulting, or business relationship between an Apple employee and another company, especially a company in the same, or a related, business as Apple.

•                    Frequent trading (buying and selling over short intervals) in Apple stock or in the stock of a company with which Apple does business.

Danger areas

• Improper or excessive payments of any of the following:

Consulting fees

Public relations fees

Advertising fees

Legal fees

Agents’ fees

Commissions

Insurance premiums

Other professional fees

Expense reports

Page 14

Employee bonuses or compensation arrangements

Employee loans

Miscellaneous expenses

Nondeductible expenses

Director and officer payments

•                  Questionable payments to agents, consultants, or
professionals whose backgrounds have not been adequately investigated, who do
not have signed contracts or letters of engagement, or whose association with
Apple would be embarrassing if exposed.

•                  Payroll-related expenditures, bonuses, awards, and
non-cash gifts given to or by Apple employees without proper approval and
adequate documentation.

•                  Payments made in cash.

•                  Checks drawn payable to “Cash” or “Bearer”.

•                  Transfers to or deposits in the bank account of an
individual, rather than in the account of the company with which Apple is doing
business.

•                  Bank accounts or property titles not in Apple’s name.

•                  Billings made higher or lower than normal prices or
fees, at a customer’s request.

•                  Payments made for any purpose other than that
described in supporting documents.

•                  Payments made to employees of customers or agencies
through intermediary persons or organizations, or that seem to deviate from
normal business transactions.

•                  Any large, abnormal, unexplained or individually
approved contracts or expenditures made without review of supporting
documentation.  Specific attention
should also be given to large individual gifts.

•                  Unusual transactions occurring with nonfunctional,
inactive, or shell subsidiaries.

•                  Undisclosed or unrecorded assets or liabilities.

•                  Use of unethical or questionable means to obtain
information, including information about competitors or information about
government acquisition plans, procurement decisions, or actions.

•                  An employment, consulting, or business relationship
between an Apple employee and another company, especially a company in the
same, or a related, business as Apple.

•                    Frequent trading (buying and selling over short
intervals) in Apple stock or in the stock of a company with which Apple does
business.