Ethics in Action Rodgers Industries Inc. completed its fiscal year on December 31. Near the end of the fiscal year the company's internal audit department determined that an important internal control procedure had not been functioning properly. The head of internal audit, Dash Riprock, reported the internal control failure to the company's chief accountant, Todd Barley wine. Todd reported the failure to the company’s chief financial officer, Josh McCoy. After discussing the issue, Josh instructed Todd not to inform the external auditors of the internal control failure and to fix the problem quietly after the end of the fiscal year. The external auditors did not discover the internal control failure during their audit. In March, after the audit was complete, the company released its annual report, including associated reports by management. As chief financial officer, Josh authorized the release of Management's Report on Internal Control, which stated that the management team believed that the company’s internal controls were effective during the period covered by the annual report. Did Josh behave ethically in this situation? Explain your answer.

BuyFind

Corporate Financial Accounting

15th Edition
Carl Warren + 1 other
Publisher: Cengage Learning
ISBN: 9781337398169
BuyFind

Corporate Financial Accounting

15th Edition
Carl Warren + 1 other
Publisher: Cengage Learning
ISBN: 9781337398169
Chapter 14, Problem 14.1TIF
Textbook Problem

Ethics in Action

Rodgers Industries Inc. completed its fiscal year on December 31. Near the end of the fiscal year the company's internal audit department determined that an important internal control procedure had not been functioning properly. The head of internal audit, Dash Riprock, reported the internal control failure to the company's chief accountant, Todd Barley wine. Todd reported the failure to the company’s chief financial officer, Josh McCoy. After discussing the issue, Josh instructed Todd not to inform the external auditors of the internal control failure and to fix the problem quietly after the end of the fiscal year. The external auditors did not discover the internal control failure during their audit. In March, after the audit was complete, the company released its annual report, including associated reports by management. As chief financial officer, Josh authorized the release of Management's Report on Internal Control, which stated that the management team believed that the company’s internal controls were effective during the period covered by the annual report.

Did Josh behave ethically in this situation? Explain your answer.

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Chapter 14 Solutions

Corporate Financial Accounting
Ch. 14 - Horizontal analysis The comparative accounts...Ch. 14 - Vertical analysis Income statement information for...Ch. 14 - Current position analysis The following items are...Ch. 14 - Accounts receivable analysis A company reports the...Ch. 14 - Inventory analysis A company reports the...Ch. 14 - Long-term solvency analysis The following...Ch. 14 - To determine: Times interest earned ratio Given...Ch. 14 - Asset turnover A company reports the following:...Ch. 14 - Return on total assets A company reports the...Ch. 14 - Common stockholders profitability analysis A...Ch. 14 - Earnings per share and price-earnings ratio A...Ch. 14 - Vertical analysis of income statement Revenue and...Ch. 14 - a Current fiscal year income from continuing...Ch. 14 - Common-sized income statement Revenue and expense...Ch. 14 - Vertical analysis of balance sheet Balance shed...Ch. 14 - a. Net income increase, 78,0% Horizontal analysis...Ch. 14 - a. (1) Current year working capital. 1,090,000...Ch. 14 - a. (1) Current years current ratio. 1,3 Current...Ch. 14 - Current position analysis The bond indenture for...Ch. 14 - Accounts receivable analysis The following data...Ch. 14 - Accounts receivable analysis Xavier Stores Company...Ch. 14 - Inventory analysis The following data were...Ch. 14 - Inventory analysis QT, Inc. and Elppa Computers,...Ch. 14 - Ratio of liabilities to stockholders' equity and...Ch. 14 - a. Hasbro, 1.7 Ratio of liabilities to...Ch. 14 - a. Mondelez International Inc., 1.4 Ratio of...Ch. 14 - a. YRC, 2.6 Asset turnover Three major segments of...Ch. 14 - Profitability ratios The following selected data...Ch. 14 - a. Year 3 return on total assets. 6.8%...Ch. 14 - Six measures of solvency or profitability The...Ch. 14 - Five measures of solvency or profitability The...Ch. 14 - Earnings per share, price-earnings ratio, dividend...Ch. 14 - a. Alphabet, 37.9 Price-earnings ratio; dividend...Ch. 14 - Earnings per share, discontinued operations The...Ch. 14 - Income statement and earnings per share for...Ch. 14 - Unusual items Explain whether Colston Company...Ch. 14 - Comprehensive Income Anson Industries, Inc....Ch. 14 - Horizontal analysis of income statement For 20V2,...Ch. 14 - Vertical analysis of income statement For 20Y2,...Ch. 14 - Effect of transactions on current position...Ch. 14 - Measures of liquidity, solvency, and profitability...Ch. 14 - Solvency and profitability trend analysis Addai...Ch. 14 - Horizontal analysis of income statement For 20Y2,...Ch. 14 - Vertical analysis of income statement For 20Y2,...Ch. 14 - Effect of transactions on current position...Ch. 14 - Measures of liquidity, solvency and profitability...Ch. 14 - Solvency and profitability trend analysis Crosby...Ch. 14 - Analyze and compare Amazon.com, Best Buy, and...Ch. 14 - Analyze and compare Alphabet, PepsiCo, and...Ch. 14 - Analyze Deere Company Deere Company (DE)...Ch. 14 - Analyze and compare Marriott and Hyatt Marriott...Ch. 14 - Ethics in Action Rodgers Industries Inc. completed...Ch. 14 - Communication The president of Freeman Industries...

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