Part 2/7:
When companies report a "material weakness," it raises red flags for investors and analysts alike. In Costco's case, this issue pertains to access to their financial control system, where employees from the IT department and possibly some outside contractors had more access than ideal. Ron Gross, a seasoned market analyst, reassured listeners that while such warnings typically make one nervous, the current situation seems to be more about procedural laxity rather than an indication of severe financial misstatements or errors.