...P Notepad, chief financial officer (CFO), has suddenly resigned and no one is discussing the reasons. ABC Technologies has received notification that the U.S. Securities and Exchange Commission (SEC) are investigating ABC Technologies’ company’s accounting practices and, from the documents they have requested, the issue seems to concern revenue recognition. Companywide and Industry wide rumors are circulating suggesting inappropriate behavior by ABC Technologies. ABC Technologies is a publicly traded company and, as such, my company is required to issue a public notice concerning the sudden vacancy of the CFO. As the staff CPA on the finance team drafting the notice, it is critical to properly communicate the current situation to the general public. • Item #1: a press release. • Item #2: an internal memo o Legal Requirements. o Public Communication Value. o Balance of calming stakeholders and ethical reporting to SEC. In conclusion, brief explanations of public perception from the press release. Resignation & Investigation Monday, December 16, 2011, Mark Chief, CEO of ABC Technologies enters my office and closes the door. It turns out that ABC Technologies is under investigation for inappropriate accounting practices, and unfortunately the CFO, John P Notepad, left without notice. ABC Technologies is in a damage control position, and needs to act fast. Below is an immediate press release to the public, and internal memo outlining the next steps in the preservation...
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...Press release concerning CFO John Doe’s resignation XYZ company-Houston, TX. Release date: August 3rd, 2015. 12:00PM Mr. John Doe has vacated the Chief Financial Officer position at XYZ Company effective August 1st 2015. Mr. Doe, who has been with our company since 2005, handed in his resignation letter directly to the Board of Directors. He has not announced his future plans. We understand that the event of his departure is controversial, and our investors have many questions regarding the corresponding SEC investigation. Rest assured that we here at XYZ are working our hardest to resolve this matter and restore the trust our investors and the public at large have placed in us. We have always maintained absolute integrity and utmost professionalism in our ethical and corporate behavior, and we stand by that assertion today. We here at XYZ appreciate your patience and continued trust, and we hope that our relationship continues well into the future. Thank you. To: Alex Morgan, Manager Date: 8/3/2015 Subject: SEC investigation Mr. Manager. At this time we are under investigation for alleged revenue misappropriation by the Securities and Exchange Commission (SEC). We are legally required to turn over all appropriate and relevant accounting evidence to the SEC investigators who will be arriving at our corporate offices later today. Our major responsibility is to make sure that all our accounting personnel are available for the investigators...
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...PR Communication Memo Beliza De La Cruz COM 530 June 25, 2012 Tonya Boddie PRESS RELEASE For Immediate Release Contact: Beliza De La Cruz at Franco Services, Inc. PH: 1 (888) FRANCOS FX: 1 (888) SERVICE Website: www.francoservices.com Email: bdelacruz@francoservices.com Resignation of Chief Financial Officer Jane Doe Bronx, NY- June 23, 2012 – Franco Services, Inc. has announced the sudden resignation of their CFO Jane Doe. The Securities and Exchange Commission (SEC) is investigating the accounting practices of Franco Services due to the unexpected resignation. Franco Services is fully cooperating with the SEC. Franco Services is willing to adapt any necessary changes and respond to all requests in order to comply with the standards set by the SEC. As interim CFO, Franco Services has appointed Franco Cruz. Cruz has been part of the accounting team at Franco Services for over 15 years. He is knowledgeable with accounting standards and practices. Cruz will be able to assist with proper compliance and respond to the SEC in a timely manner regarding any requests. Further information can be obtained on Franco Services website: www.francoservices.com or by emailing Beliza De La Cruz at: bdelacruz@francoservices.com About Franco Services We are a full service accounting firm providing a wide range of accounting and auditing assistance to corporations, small businesses, and individuals. interoffice memorandum to: Manager from: Beliza De La Cruz subject:...
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...SUBJECT: PR Communications Memo The purpose of this memo is to provide information regarding the recent press release. Jason Castro resigned as the Chief Financial Officer (CFO) of Winter Industries without providing a reason for his resignation. The resignation is effective immediately. Lily Smith was appointed by the Board of Directors as the interim CFO until the Board appoints a permanent CFO. Smith has been a part of Winter Industries for 20 years overseeing the Operations management department. While serving as interim CFO, Smith will retain her responsibilities of overseeing business operations and production here at Winter Industries. Winter Industries is a publicly traded company and is required to issue a public notice announcing this sudden vacancy. We are obligated to inform our stakeholders and customers of any changes that occur within our company. The historical financial records prepared by Castro were reviewed and questions arose regarding the handling of our company's finances. Currently, the U.S Securities and Exchange Commission (SEC) is investigating the accounting practices of Winter Industries. Legally, our company is required to comply with the SEC and provide all information requested with regards to this investigation. Public communication is important when it comes to situations of this sort. Communicating to the public early on is key too. "From a public relations standpoint, it may often make sense to go public early on, especially if...
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...company. He was gifted in many areas as procurement direct for payables. He had a tremendous leadership skill and was a role model. He managed the accounting department and brought productivity up to speed. In 2002 MB was nominated as Chief Financial Officer (CFO). Prior to his appointment our CEO A H had an interview with him to make sure that he was the right candidate for this position. After his interview with our CEO, Walter ordered a security clearance screening to be done on MB to make sure that there were no skeletons in the closet. Shortly after his interview, human resources had completed a background and security screening on MB. Our human resources personnel Stacy had called for his college transcripts as well. And they discovered that MB had not graduated from Accounting, despite the fact that this was listed on his resume. Our human resources director Stacy contacted MB to ask him about this discrepancy, and he immediately confirmed that he had not graduated. MB, who had publicly acknowledge the fact that he received a bachelor’s degree in accounting/Finance in 1969 and had attended National Business College in Roanoke Virginia was caught lying on his resume. Shortly thereafter, he submitted his resignation as Chief Financial Controller. He also immediately...
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...Communications Memo Legal Obligations Amid the turmoil of a sudden resignation and rumors of inappropriate accounting practices, we cannot forget our legal obligations. The Securities and Exchange Commission(SEC) is investigating our situation and requesting documentation. The specifics of these requests lead us to believe that the questionable practices may involve revenue recognition. The SEC requires that we file the following information because we are a publicly held company (U.S. Securities and Exchange Commision, 2012) . • Our directors, officers, and particular shareholders o Salaries o Benefits o Any transactions between the company and the people listed above • Our operations • Financial condition of the business o Independently audited financial statements • Our position o Terms of contracts or lease agreements Value of Public Communication Public opinion is extremely important. The public needs to see active participation by the entire company in repairing this situation. We should strive for professionalism, humility, and honesty. The quick resignation of the CFO combined with this SEC investigation will cause the public and our stockholders to doubt our company’s honesty. The goodwill we have worked so hard to gain will be gone if we do not act fast. In an attempt to regain public trust, we need to be as transparent as possible. Transparency will require that we inform the public of our actions. To accomplish this we should consider adopting a...
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...management resources, distribution of goods and services to customers, and analysis of systems are conducted. Anderson later became the president and CEO of F&C international, Inc. As a COO, Fletcher Anderson had interaction with F&C`s independent auditors. He and controller supposed to provide all the documents and answer all the questions of the independent auditors but they didn�t tell them about the fraud of the company. Craig Schuster served as the Chief Financial Officer of F&C international. He was responsible for managing the financial risks, financial planning, and record keeping of the company, as well as financial reporting to higher management. As the CFO, Schuster oversaw the preparation of and signed the company's registration statements filed with the SEC, including the company's Form 10-K reports. As a CFO, Craig Schuster had interaction was...
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...The Violet Bay School INTRODUCTION According to the Government Accounting Standards Board (GASB), the objective of financial reporting is to assist a government entity in fulfilling its obligation to be publicly accountable and to enable users to assess accountability (GASB 2007; Government Accountability Office [GAO] 2007). Budgeting, a process whereby government administrators forecast expected revenues and identify planned expenditures, is an integral part of accountability, and the extent to which a governmental entity adheres to its budget is a major consideration when assessing accountability. In August 2005, Violet Bay1 taxpayers were informed that their school system had run a $7 million deficit after several previous assurances that the system was fiscally sound and would finish the year with a surplus. By November 2005, an external audit determined that the actual deficit was $12.1 million. Three months later, a special grand jury report was released describing the causes of the financial crisis and addressing the means to correct the situation. What went wrong? Place yourself in the role of an auditor or a consultant and identify the problems. As you do so, you will better appreciate the importance of internal control and will gain experience in identifying and assessing client risks. While this case involves a governmental entity—a school district—no prior coursework in governmental accounting is required to complete case requirements. PART I – THE BUDGET PROCESS The...
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...1. Identify four to six procedures auditors may perform as part of the client acceptance process. Are any of the procedures identified by you required by generally accepted auditing standards? 1. Review available financial statements, minutes of board of directors’ meetings prior, tax returns and other documents pertinent to the client’s operations. 2. Perform preliminary analytical review procedures to identify areas of high risk and to understand the nature of the client’s financial statements. 3. Determine whether the firm is independent with respect to the client. (required) 4. Communicate with the predecessor auditor. (required) 5. Tour the client facilities to learn of the nature and scope of operations. 6. Evaluate the need for and availability of specialists. (required) 2. Identify and discuss financial and non-financial factors that are relevant to the decision to accept the potential client. Financial Factors: 1. Retained earnings balance shows that the company has been profitable lately. 2. The company’s sales show a positive trend 3. Current ratio, Account receivables and inventory turnover show an acceptable level 4. Accounts payable have increased by more than 35% comparing to last year from 3,683 to 4,988 in the same time the long term debt has increased slightly. 5. Strong increase in the company’s assets over the last three year by 15% 6. The company has invested a substantial amount of money last year mainly from the retaining earnings cumulated...
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...1. Introduction Ocean Manufacturing Inc. is a home appliances manufacturer with a favorable market position looking to be listed at NASDAQ within the next few years. Apart from requesting an audit, B&F is asked to provide assistance with regard to the upcoming IPO and Ocean’s newly installed IT system. This paper is structured in two different memos. The first one elaborates on the evaluation of Ocean from five critical standpoints and concludes with an opinion on whether to accept the engagement. The latter one points out five critical factors, which have to be taken into account when the audit is accepted. 2. Independence review While establishing the audit team, independence requirements have to be fulfilled. It is crucial that all the individuals assigned to the audit are independent of Ocean. After conferring to the report of disclosed stock investments it turns out that a partner at the Salt Lake City office owns common stock in a venture capital fund which in turn holds shares in Ocean. The partner in question is not part of the audit team and the holding in Ocean represents a marginal share of the total funds’ holdings. Since the partner will not be in touch with the customer Ocean, and the amount of shares the fund has invested in Ocean is negligible, the authors can conclude that there are no independence issues at hand and Ocean could be accepted as a client. 3. Financial comparison When comparing the financial statements the first matter of concern...
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...Table of Contents Writing a Memo 4 Audience and Purpose 4 Parts of a Memo 4 Heading Segment 4 Opening Segment 4 Context 5 Conclusion 5 Sample Memos 5 1st sample 5 2nd sample 6 Writing a circular 7 1. Circular regarding a computer training programme. 7 2. Circular regarding office identification 7 3. Circular regarding a visit of a senior manager 8 Writing a notice 9 Format of a notice 9 Cause and effect 11 EFFECT — CAUSE 11 Summarizing 13 Meeting Minutes 14 Business Letters 16 Writing the Basic Business Letter 16 Parts of a Business Letter 16 Covering letter 21 Job advertisement 22 Job adverts checklist 22 Senior Accountant position 22 Senior financial accountant, REF: F90111 23 Accounting terms 25 General Business Vocabulary Terms 27 Advertising 27 Banking 28 Company Structure 28 Contracts 29 Employment 30 Import-Export 31 Insurance 31 Law 32 Marketing 33 Money 34 Presentations 34 Selling 35 Graphs and Charts 37 Presenting Visuals - useful phrases & vocabulary : 37 Commenting trends - useful phrases : 37 Conclusions - useful phrases : 38 Presentations 39 Writing a Memo Audience and Purpose Memos have a twofold purpose: they bring attention to problems and they solve problems. They accomplish their goals by informing the reader about new information like policy changes, price increases, or by persuading the reader to take an action, such as attend a meeting, or change a current...
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...WayerskiLMGT7019-8-3 | . ------------------------------------------------- ------------------------------------------------- ------------------------------------------------- ------------------------------------------------- August 17th, 2013 3 The year was 2002 and Tyco International LTD chairman of the board and also serving as the Chief Executive Officer, Dennis Kozlowski announced his resignation due to soon to be accused of 30 counts of fraud to the amount of $150 million. That wasn’t the only thing that Kozlowski took in addition he embezzled over $400 million dollars between private stock sales, unauthorized loans, unapproved bonuses and frivolous spending during his hierarchy (Kaplan 2009). Kozlowski was employed with Tyco for over 27 years and was an intricate force of their development of becoming one of the most successful U.S companies with a worth of over $100 billion. Kozlowski was becoming a leader to watch due to his success at leading Tyco. Kozlowski was also second highest paid CEO in the U.S at 170 million annually (Kaplan 2009). Kozlowski quoted about his leadership style “I really believe in finding the best people in the world to run our businesses. We are very decentralized and leave...
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...FROM GREAT TO GHASTLY: HOW TOXIC ORGANIZATIONAL CULTURES POISON COMPANIES THE RISE AND FALL OF ENRON, WORLDCOM, HEALTHSOUTH, AND TYCO INTERNATIONAL David R. Lease, Norwich University Abstract This paper presents an analytical and comparative study of four recent corporate scandals involving organizations that had previously been recognized as both ethically and organizationally sound. Based on these case studies, the following issues are discussed: (1) The role of leader behavior and organizational/leadership styles in shaping the corporate organizational culture of an organization, and (2) The extent to which this culture renders the organization and its members (including the top executives) prone to ethical misbehavior. The four companies selected for this case analysis are: Enron Corporation, WorldCom, Inc., Tyco International, Ltd., and HealthSouth Corporation. Each case is considered individually. The basic elements in the scandal are outlined and the principal aspects of each organization’s corporate culture discussed, with special emphasis on the influence of leadership styles and leadership behavior/practices on organizational culture. The four cases are then compared and contrasted in the light of the existing evidence on the relation between corporate culture and ethical misbehavior. PRELUDE “We were doing something special. Magical. It wasn’t a job – it was a mission. We were changing the world. We were doing God’s work.” – Jeffrey Skilling, former Enron COO, President...
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...WorldCom Case Study1 By Dennis Moberg (Santa Clara University) and Edward Romar (University of Massachusetts-Boston) (The original of this document can be found at the Santa http://www.scu.edu/ethics/dialogue/candc/cases/worldcom.html#one. Clara University website at An update for this case is available at http://www.scu.edu/ethics/dialogue/candc/cases/worldcomupdate.html . Note that this update is not part of the syllabus for the PRM or Associate PRM exam. It is included for reference and explanation only.) 2002 saw an unprecedented number of corporate scandals: Enron, Tyco, Global Crossing. In many ways, WorldCom is just another case of failed corporate governance, accounting abuses, and outright greed. But none of these other companies had senior executives as colorful and likable as Bernie Ebbers. A Canadian by birth, the 6 foot, 3 inch former basketball coach and Sunday School teacher emerged from the collapse of WorldCom not only broke but with a personal net worth as a negative nine-digit number.2 No palace in a gated community, no stable of racehorses or multi-million dollar yacht to show for the telecommunications giant he created; only debts and red ink--results some consider inevitable given his unflagging enthusiasm and entrepreneurial flair. There is no question that he did some pretty bad stuff, but he really wasn't like the corporate villains of his day: Andy Fastow of Enron, Dennis Koslowski of Tyco, or Gary Winnick of Global Crossing.3 Personally, Bernie...
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...WorldCom Case Study1 By Dennis Moberg (Santa Clara University) and Edward Romar (University of Massachusetts-Boston) (The original of this document can be found at the Santa http://www.scu.edu/ethics/dialogue/candc/cases/worldcom.html#one. Clara University website at An update for this case is available at http://www.scu.edu/ethics/dialogue/candc/cases/worldcomupdate.html . Note that this update is not part of the syllabus for the PRM or Associate PRM exam. It is included for reference and explanation only.) 2002 saw an unprecedented number of corporate scandals: Enron, Tyco, Global Crossing. In many ways, WorldCom is just another case of failed corporate governance, accounting abuses, and outright greed. But none of these other companies had senior executives as colorful and likable as Bernie Ebbers. A Canadian by birth, the 6 foot, 3 inch former basketball coach and Sunday School teacher emerged from the collapse of WorldCom not only broke but with a personal net worth as a negative nine-digit number.2 No palace in a gated community, no stable of racehorses or multi-million dollar yacht to show for the telecommunications giant he created; only debts and red ink--results some consider inevitable given his unflagging enthusiasm and entrepreneurial flair. There is no question that he did some pretty bad stuff, but he really wasn't like the corporate villains of his day: Andy Fastow of Enron, Dennis Koslowski of Tyco, or Gary Winnick of Global Crossing.3 Personally, Bernie...
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