STRATEGIC MGMT LL CASEBOOK W/CONNECT
4th Edition
ISBN: 9781307485110
Author: Rothaermel
Publisher: MCG/CREATE
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Question
Chapter 12, Problem 3ESI
a)
Summary Introduction
To determine: The potential ill effects of large and increasing disparity in CEO pay.
b)
Summary Introduction
To determine: Whether the current executive pay is justified and give reasons for justification.
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Students have asked these similar questions
According to a recent study of approximately 347 financial statement frauds by the law enforcement agencies, senior management is the group most likely to commit financial statement fraud. The CEO was involved in 72% of these frauds, and the CFO’s involvement was 65%. Either the CEO or the CFO was involved in 89% of the cases. Motives for senior managers to commit financial statement fraud are varied.
Following are questions which might help to better understanding the reasoning behind.
(a) Appraise the reasons senior management would overstate or understate business performance. Elaborate.
(b) Why would CFOs cook the books even though they know that it is against the law? Elaborate.
Your company decides to hire a new employee named
Philip. Philip makes $40,000 salary for the year. The
$40,000 Philip earns is:
a measurement of his work's value to the
company.
the same as gold
his total compensation adjusted for inflation.
an example of goods and services.
While working as a new employee at the Defense Contracting Audit Agency, you noticed that a fellow employee was studying intensely for the Financial Accounting section of the CPA test. You planned to sit for that test section in two months, and your colleague was sitting for that test section next Thursday.
On Thursday evening, you phoned your friend to see how she was doing after the test. She thanked you for being considerate and told you that she was emotionally drained. Nonetheless, she then kept you on the phone for 15 minutes, telling you about the “nasty” Statement of Cash Flows and Consolidation problems she encountered.
What is the ethical issue?
Did either of you commit a discreditable act under the Code of Conduct?
Chapter 12 Solutions
STRATEGIC MGMT LL CASEBOOK W/CONNECT
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