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Financial Reporting Excello Telecommunications Catherine Richard ETH376 October 6th, 2014 Melanee Robertson Financial Reporting Excello Telecommunications Excello Telecommunications has had a good profit margin for several years. Recently they have had increased competition for their products by overseas manufacturers. With these increases their earnings will not be met for the first time in the company’s history. With the blow of this being felt high in the corporation, there are concerns about the effects on stocks, stock options and bonuses. There is currently talk of a sale of product to Data Equipment that needs to take place rapidly to benefit the company. The company has a few courses to take and must make the…show more content…
Making the company profitable at any cost and means is Reed’s goal, ethical or not. Fuller has explained the regulations and laws to the accounting department and to Reed, and Reed seems to not care about cost to the company, just profitability. Share prices will also remain high because of this decision to report in 2010. This would only benefit managers and personnel that have stock options, keeping them interested in the company and their investments only. Other options that are being discussed by Excello Telecommunications are to transfer the product to Data Equipment by December 31st, 2010 and agree that the customer could return it for a full refund after it arrives at Data Equipments warehouse. This would be unethical and reflect badly in the financial statements, because there would be large debits and credits in the financial information that would look obviously suspicious. This would raise questions during audits and board meetings because of the amounts of money being credite and debited in such a close amount of time. This would not look good for the company and would cause more financial distress with fines and penalties. Excello Telecommunications has another option that requires offering Data Equipment a discount for purchasing the equipment by December 31st, 2010. This would be a legal and ethical way of dealing with the situation. Not only does it require that the money is recorded in 2010, but it also increases
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