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    The company with which you are currently employed is experie

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    The company with which you are currently employed is experiencing a financial crisis. The chief financial officer (CFO) has suddenly resigned and no one is discussing the reasons. The U.S. Securities and Exchange Commission (SEC) is investigating your company's accounting practices and, from the documents they have requested, the issue seems to concern revenue recognition. Rumors are beginning to circulate that suggest inappropriate behavior on the part of your company. The organization is a publicly traded company and, as such, the company is required to issue a public notice concerning the sudden vacancy of the CFO. As a certified public accountant on the team drafting the notice, you are involved in communicating the current situation to the general public.

    Write a press release. You may research to find examples of public notices. Use the examples to determine how you will format your press release.
    Write an accompanying internal memo of no more than 2 pages in length to your manager. Complete the following in your memo:
    Outline what your company is legally required to do.
    Explain the value of the public communication in this situation.
    Examine the balance between calming external stakeholders and the ethical considerations of providing all the information that is required by the SEC.
    Explain how the perception of the press release will affect public opinion.

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    PRESS RELEASE
    Cleveland, Ohio, January 15, 2012 (BUSINESS WIRE) - Company X announced today that the SEC has formally requested company documentation concerning internal revenue recognition practices. There has been speculation from the SEC's request that revenue recognition practices are a concern at the company. No formal statement from the SEC has yet been received; this has only been a request for documentation. No current plans to restate financial statements are underway.
    As a result, the company has advised that they are currently reviewing their revenue recognition practices with their accounting staff and auditing firm. Company X is also reviewing their internal control procedures as a standard safeguard, because there was an SEC investigatory letter. By doing so, the company will ensure that all internal controls are working properly, and in-place as the company intended.
    Michael Smith, CFO, has also voluntarily resigned. The exact reasons are unknown at this time. We encourage each member of the media and the public to steer away from speculation at this time. As new developments arise from our internal investigation, and from the SEC's inquiry, we will immediately release the information to the public. We thank you for your patience, and we will be in constant communication both with the SEC and with the public, throughout ...

    Solution Summary

    The company with which you are currently employed is experiencing a financial crisis. The chief financial officer (CFO) has suddenly resigned and no one is discussing the reasons. The U.S. Securities and Exchange Commission (SEC) is investigating your company's accounting practices and, from the documents they have requested, the issue seems to concern revenue recognition. Rumors are beginning to circulate that suggest inappropriate behavior on the part of your company. The organization is a publicly traded company and, as such, the company is required to issue a public notice concerning the sudden vacancy of the CFO. As a certified public accountant on the team drafting the notice, you are involved in communicating the current situation to the general public.

    Write a press release. You may research to find examples of public notices. Use the examples to determine how you will format your press release.
    Write an accompanying internal memo of no more than 2 pages in length to your manager. Complete the following in your memo:
    Outline what your company is legally required to do.
    Explain the value of the public communication in this situation.
    Examine the balance between calming external stakeholders and the ethical considerations of providing all the information that is required by the SEC.
    Explain how the perception of the press release will affect public opinion.

    $2.19

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