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 Barleywine. 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

Financial And Managerial Accounting

15th Edition
WARREN + 1 other
Publisher: Cengage Learning,
ISBN: 9781337902663
BuyFind

Financial And Managerial Accounting

15th Edition
WARREN + 1 other
Publisher: Cengage Learning,
ISBN: 9781337902663

Solutions

Chapter
Section
Chapter 14, Problem 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 Barleywine. 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.

Expert Solution

Want to see the full answer?

Check out a sample textbook solution.

Want to see this answer and more?

Experts are waiting 24/7 to provide step-by-step solutions in as fast as 30 minutes!*

*Response times vary by subject and question complexity. Median response time is 34 minutes and may be longer for new subjects.

Chapter 14 Solutions

Financial And Managerial Accounting
Ch. 14 - The comparative accounts payable and long-term...Ch. 14 - Income statement information for Einsworth...Ch. 14 - The following items are reported on a companys...Ch. 14 - A company reports the following: Determine (a) the...Ch. 14 - A company reports the following: Determine (a) the...Ch. 14 - The following information was taken from Charu...Ch. 14 - A company reports the following: Determine the...Ch. 14 - A company reports the following: Determine the...Ch. 14 - A company reports the following income statement...Ch. 14 - A company reports the following: Determine (a) the...Ch. 14 - A company reports the following: a.Determine the...Ch. 14 - Vertical analysis of income statement Revenue and...Ch. 14 - The following comparative income statement (in...Ch. 14 - Common-sized income statement Revenue and expense...Ch. 14 - Vertical analysis of balance sheet Balance sheet...Ch. 14 - Income statement data for Winthrop Company for two...Ch. 14 - The following data were taken from the balance...Ch. 14 - PepsiCo, Inc. (PEP), the parent company of...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 - Hasbro, Inc. (HAS), and Mattel, Inc. (MAT), are...Ch. 14 - Recent balance sheet information for two companies...Ch. 14 - Three major segments of the transportation...Ch. 14 - The following selected data were taken from the...Ch. 14 - Ralph Lauren Corporation (RL) sells apparel...Ch. 14 - Six measures of solvency or profitability Obj. 4,...Ch. 14 - Five measures of solvency or profitability The...Ch. 14 - Earnings per share, price-earnings ratio, dividend...Ch. 14 - The table that follows shows the stock price,...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 - A Horizontal analysis of income statement For...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 - The condensed income statements through operating...Ch. 14 - The following table shows the stock price,...Ch. 14 - Deere Company (DE) manufactures and distributes...Ch. 14 - Marriott International, Inc. (MAR), and Hyatt...Ch. 14 - Ethics in Action Rodgers Industries Inc. completed...Ch. 14 - Real-world annual report The financial statements...Ch. 14 - Communication The president of Freeman Industries...

Additional Business Textbook Solutions

Find more solutions based on key concepts
Give an example of a corrective control.

Accounting Information Systems

Why is goal congruence important?

Managerial Accounting: The Cornerstone of Business Decision-Making

What are the two definitions of cash, and why do corporate treasurers often use the second definition?

Fundamentals of Financial Management, Concise Edition (with Thomson ONE - Business School Edition, 1 term (6 months) Printed Access Card) (MindTap Course List)

Could the United States ever experience another Great Depression? Why or why not?

Microeconomics: Private and Public Choice (MindTap Course List)