2.99 See Answer

Question: The discussion between Don Chambers, the CEO,


The discussion between Don Chambers, the CEO, and Ron Smith, the CFO, was get- ting heated. Sales and margins were below expectations, and the stock market analysts had been behaving like sharks when other companies’ published quarterly or annual financial results failed to reach analysts’ expectations. Executives of companies whose performance numbers failed to meet the levels projected by the executives or the analysts were being savaged. Finally, in frustration, Don exclaimed, We must make our quarterly numbers! Find a way, change some assumptions, capitalize some line expenses—just do it! You know things will turn around next year.
And he stormed out of Ron’s office.
Question
1. What should Ron consider when making his decision?


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> Should executives and directors be sent to jail for the acts of their corporation's employees?

> Why didn’t some corporations protect women employees from sexual abuse before 2017–2019?

> How can corporations ensure that their employees behave ethically?

> Why is it important for the clients of professional accountants to be ethical?

> Why might ethical corporate behavior lead to higher profitability?

> On any given day, a bank may have either a surplus or a deficiency of cash. When this occurs, banks tend to lend to and borrow from other banks at a negotiated rate of interest. These interbank loans could be as short as one day and as long as several mo

> What could professional accountants have done to prevent the development of the credibility gap and the expectations gap?

> Why are we more concerned now than our parents were about fair treatment of employees?

> Why have concerns over pollution become so important for management and directors?

> Should organizations that have a risk-taking culture, such as the one developed by Stan O’Neil at Merrill Lynch, enjoy the gains and suffer the losses, without recourse to government bailouts?

> Should the CEOs who refused to have their firms invest in mortgage-backed securities in the early years because the risks were too great receive bonuses in the latter years because their firms did not incur any mortgage-backed security losses? How would

> Should CEOs who made large bonuses by having their firms invest in mortgage-backed securities in the early years have to repay those bonuses in the later years when the firm records losses on those same securities?

> The government bailout of the financial community included taking an equity interest in publicly traded companies such as American International Group (AIG). Is it right for the government to become an investor in publicly traded companies?

> How much should the exiting CEOs of Fannie Mae and Freddie Mac have received when they were replaced in September 2008?

> Identify and explain five examples where executives or directors faced moral hazards and did not deal with them ethically.

> How could ethical considerations improve unbridled self-interest in ethical decision making?

> Wal-Mart has a brand image that triggers strong reactions in North America, particularly from people whose businesses have been damaged by the company’s over- powering competition with low prices and vast selection and by those who value the small-busine

> How could increased regulation improve the exercise of unbridled self-interest in decision making?

> What were the three most important ethical failures that contributed to the subprime lending fiasco?

> Does the Dodd-Frank Act go far enough, or are some important issues not addressed?

> Should members and executives in investment firms be forced to be members of a profession with entrance exams and with adherence to a professional code such as is the case for professional accountants or lawyers?

> Given that the marketplace for securities is global, and that the risks involved can affect people worldwide, should there be a global regulatory regime to protect investors? If so, should it be based on the regulations of one country? Should enforcement

> The global economic crisis was caused by the meltdown in the U.S. housing market. Should the U.S. government bear some of the responsibility of bailing out the economies of all countries that were harmed by this crisis?

> Are the criticisms that mark-to-market (M2M) accounting rules contributed to the economic crisis valid?

> How much and in which ways did unbridled self-interest contribute to the subprime lending crisis?

> What would you list as the five most important ethical guidelines for dealing with North American employees?

> Do professional accountants have the expertise to audit corporate social performance reports?

> Bernie Madoff perpetrated the world’s largest Ponzi scheme,1 in which investors were initially estimated to have lost up to $65 billion. Essentially, investors were promised—and some received—returns

> Why should a corporation make use of a comprehensive framework for considering, managing and reporting corporate social performance? How should they do so?

> Descriptive commentary about corporate social performance is sometimes included in annual reports. Is this indicative of good performance, or is it just window dressing? How can the credibility of such commentary be enhanced?

> How could a corporation utilize stakeholder analysis to formulate strategies?

2.99

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