18Feb 2022 by
Topic: Ethical Behavior in Business Environments PPTand othersPages and Word Count: 4+4 pages (2,200 words)
A. Part1: 4 pages (Please find word count for each slide)Reference: 2 total. (References not older than 10 years, PEER-REVIEWED ARTICLES.)APA7. During the summer of 2002, the financial press reported thatCitigroup was being investigated for allegations that it had arrangedtransactions for Enron so as to intentionally misrepresent the nature of thetransactions and consequently achieve favorable balance sheet treatment. Essentially,the deals were structured to make it appear that money was coming into Enronfrom trading activities, rather than from loans. A July 23, 2002, The New York Times article by Richard Oppel andKurt Eichenwald entitled Citigroup Said to Mold Deal to Help Enron SkirtRules suggested that Citigroup intentionally kept certain parts of a secretoral agreement out of the written record for fear that it would change theaccounting treatment. Critics contend that this had the effect of significantlyunderstating Enrons liabilities, thus misleading investors and creditors.Citigroup maintains that, as a lender, it has no obligation to ensure that itsclients account for transactions properly. The proper accounting, Citigroupinsists, is the responsibility of the client and its auditor. Assume that your colleagues are your audience.
Title: Ethical Behavior in Business Environments
Who are the stakeholders in this situation? Bullet Point 1 Bullet Point 2 Bullet Point 3Note:
Do you think that a lender, in general, in arranging so-called structured financing has a responsibility to ensure that its clients account for the financing in an appropriate fashion, or is this the responsibility of the client and its auditor? Bullet Point 1 Bullet Point 2 Bullet Point 3Note:
What effect did the fact that the written record did not disclose all characteristics of the transaction probably have on the auditors ability to evaluate the accounting treatment of this transaction? Bullet Point 1 Bullet Point 2 Bullet Point 3Note:
The NY Times article noted that in one presentation made to sell this kind of deal to Enron and other companies, Citigroup stated that using such an arrangement eliminates the need for capital markets disclosure, keeping structure mechanics private.Why might a company wish to conceal the terms of a financing arrangement from the capital markets (investors and creditors)? Bullet Point 1 Bullet Point 2 Bullet Point 3Note:
The NY Times article noted that in one presentation made to sell this kind of deal to Enron and other companies, Citigroup stated that using such an arrangement eliminates the need for capital markets disclosure, keeping structure mechanics private.Is this appropriate?? Bullet Point 1 Bullet Point 2 Bullet Point 3Note:
The NY Times article noted that in one presentation made to sell this kind of deal to Enron and other companies, Citigroup stated that using such an arrangement eliminates the need for capital markets disclosure, keeping structure mechanics private.Do you think it is ethical for a lender to market deals in this way? Bullet Point 1 Bullet Point 2 Bullet Point 3Note:
B. Part2: 4 pages (Please find word count for each section.)Reference: No need.
The financial statements of Apple Inc. for 2014 are presented in Appendix A.See PDF attached.
Identify the liabilities classified by Apple as current.
Mike, a student, asks your help in understanding some characteristics of a corporation. Explain each of these to Mike.
Separate legal existence.
Limited liability of stockholders.
Transferable ownership rights.
A corporation has been defined as an entity separate and distinct from its owners. In what ways is a corporation a separate legal entity?
What three conditions must be met before a cash dividend is paid?
SUPERVALU, one of the largest grocery retailers in the United States, is headquartered in Minneapolis. Suppose the following financial information (in millions) was taken from the companys 2022 annual report: net sales $44,597, net income $393, beginning stockholders equity $2,581, and ending stockholders equity $2,887.There were no dividends paid on preferred stock. The return on common stockholders equity is 14.37%.Provide a brief interpretation of your findings.
What criteria must be met before a contingency must be recorded as a liability?How should the contingency be disclosed if the criteria are not met?
A large retailer was sued nearly 5,000 times in a recent yearabout once every 2 hours every day of the year. It has been sued for everything imaginableranging from falls on icy parking lots to injuries sustained in shoppers stampedes to a murder with a rifle purchased at one of its stores. The company reported the following in the notes to its financial statements. The Company and its subsidiaries are involved from time to time in claims, proceedings, and litigation arising from the operation of its business. The Company does not believe that any such claim, proceeding, or litigation, either alone or in the aggregate, will have a material adverse effect on the Companys financial position or results of its operations.
Explain why the company does not have to record these contingencies.
Comment on any implications for analysis of the financial statements.
The board of directors is considering a stock split or a stock dividend. They understand that total stockholders equity will remain the same under either action. However, they are not sure of the different effects of the two actions on other aspects of stockholders equity. Explain the differences to the directors.
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