Legality and Ethicality of Corporate Governance

Legality and Ethicality of Corporate Governance
Frank Campbell, the director of United thermostatic Controls Southern Division, was dissatisfied with the way the division had not met the targeted budget for 2010. He had found a way to make the sales gross increase. By increasing the sales revenue for his division, Campbell would be satisfied.
Campbell had found a way to increase sales by sending out two shipments to customers. These shipments were not to be delivered until 2011. The customers had contract the dates they fateed their product. Instead of offering the customers a deal, Campbell displace the merchandise and reported the sales revenue to the financial reports. Assuming that this was okay, Campbell permit it be. It wasnt until the audit committee had seen the reports, the questions would arise. The internal auditors had learned that thither was pressure put on the accounting department by Campbell. The main concern of the auditors was the coverage of the two shipments valuing $150,000 (Mintz, 2011). Since there was not an expressed written agreement between United and the customers, the shipments should not have been sent. Campbell had been reassured by Lorenzo, Executive VP of Sales & Marketing, that he seen nothing wrong with recording the revenues in 2010.



However, this was still a concern for the CPA, Tony Cupertino.
The legality of the events was within the laws of federal, state, and local government. By reporting the revenue properly after sending out the shipments without violating the play tricks shipping point, the generally accepted accounting principles (GAAP) were not violated. The revenue recognition principle was not violated. Cupertino had debated on whether to take his findings to the CFO, Walter Hayward. Although the shipments were sent before they were scheduled to, Cupertino was uncertain whether to pursue the issue each further.
The criteria by which Sarbanes-Oxley would apply are the assessment of internal controls and criminal...If you want to get a full essay, order it on our website: Ordercustompaper.com



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