Explore BrainMass

Discovery of financial error

This content was STOLEN from BrainMass.com - View the original, and get the already-completed solution here!

As the CFO of SAL Inc., you discover a misstatement that overstated net income in the prior year's financial statements. The misleading financial statements appear in the company's annual report that was issued to banks and other creditors less than a month ago. After much thought about the consequences of telling the president about this misstatement, you gather your courage to inform him. The president suggests that you simply adjust this year's financial statements since what the banks and creditors don't know won't hurt them.

a. Who are the stakeholders in this situation?

b. What are the ethical issues involved in this situation?

c. What would you as a CFO do in this situation?

© BrainMass Inc. brainmass.com October 24, 2018, 11:26 pm ad1c9bdddf

Solution Preview

Hi there,

Here are your answers:

Question: Who are the stakeholders in this situation?

Answer: The stakeholders are the shareholders of the company or even potential investors and readers of SAL Inc's financial reports. These are the people that stand to be affected by how the financial results of the company are communicated to the public.

Question: What are the ...

See Also This Related BrainMass Solution

Business Consulting

A. In regards to Interpersonal Aspects of Data Gathering, what challenges does this approach create for a consultant? In the consulting work, how important is it to understand the way the problem is being managed, along with the presenting problem?

B. There are advantages of whole-system discovery when conducting internal research. Are there types of consulting problems where whole-system discovery is more effective? Are there types of consulting problems where third-party consulting is more effective? What criteria should a consultant use for deciding which is more appropriate?

C. If a consultant is conducting a competitive study, what assumptions does the client have that might influence the way the results are presented or received?

View Full Posting Details