Accounting Functions for The IPO Essay
Order ID |
53563633773 |
Type |
Essay |
Writer Level |
Masters |
Style |
APA |
Sources/References |
4 |
Perfect Number of Pages to Order |
5-10 Pages |
Description/Paper Instructions
Accounting Functions for The IPO Essay
FRL 4083 Midterm Facts and At Home Questions
Spring 2019 Dr. Solis
Facts:
ABC Company is a publicly traded company. It has about 200,000 shareholders, however, some 150,000 of those shares are owned by large pension funds. The bank for ABC Company is No Fraud National Bank.
ABC’s President, Big Bucks, is also on the board of No Fraud National. ABC’s Chief Financial Officer, Time Value, is also on the board of ABC and No Fraud.
ABC went public two years ago in an IPO. At that time, Time Value was the CPA who handled the accounting functions for the IPO since he was a senior partner in the CPA firm of Spreadsheet, Calculator and Itemization. Time Value provided an audit of the financial statements of ABC for this IPO and this audit report had no exceptions. Time Value had been aware of several pending lawsuits but he considered them to be frivolous claims so he made no allowance for them and listed them in the footnotes as claims against the company which had no merit.
It is now 2 years later and the financial results of ABC have been terrible. The stock has lost 95% of its IPO value and many of the shareholders are quite unhappy with these results. One factor which led to this reduction in stock value was that one of those “frivolous claims” ended up with the largest product liability jury verdict in history and the company did not have sufficient assets to pay for the appeal bond that was required to appeal the jury verdict. Because of this, they entered into a settlement agreement with the plaintiffs which requires them to pay the plaintiffs 50 million dollars each year for the next 20 years. ABC has made these payments, but has then not had the cash to pay their unsecured creditors.
What led to this jury verdict was a product ABC has made for many years- a nail polish remover. In 2000, it was discovered that this nail polish remover was causing skin cancer in many of the persons who used the product frequently. ABC denied that their product was dangerous. At the trial, a memo from the chemical engineers at ABC set forth the fact that the product was dangerous and could cause an increased risk of skin cancer if it was used frequently. The CEO of ABC refused to issue a product recall and he also testified at a Congressional hearing that the product had been thoroughly tested and it was “safe enough to use on a newborn baby’s skin and would cause no damage to such sensitive skin”. He then fired the chemical engineers who had written the memo and he advised the Board of ABC that the product was safe and that the engineers had been fired because they wanted too much money for the work they did.
Questions: 25 pts each
- Describe and explain one of each of the following types of agency relationships from the facts of this case; principal/ agent; independent contractor.
- Under what agency theories will Time Value, Big Bucks, ABC Company and No Fraud be liable for payment of the jury verdict? What duties did each have that they did not meet?
- Explain any action the chemical engineers may have against ABC, the CEO of ABC and the CPA firm known as Spreadsheet, Calculator and Itemization for wrongful termination. What arguments would these parties make to defend themselves from this wrongful termination suit?
RUBRIC
QUALITY OF RESPONSE |
NO RESPONSE |
POOR / UNSATISFACTORY |
SATISFACTORY |
GOOD |
EXCELLENT |
Content (worth a maximum of 50% of the total points) |
Zero points: Student failed to submit the final paper. |
20 points out of 50: The essay illustrates poor understanding of the relevant material by failing to address or incorrectly addressing the relevant content; failing to identify or inaccurately explaining/defining key concepts/ideas; ignoring or incorrectly explaining key points/claims and the reasoning behind them; and/or incorrectly or inappropriately using terminology; and elements of the response are lacking. |
30 points out of 50: The essay illustrates a rudimentary understanding of the relevant material by mentioning but not full explaining the relevant content; identifying some of the key concepts/ideas though failing to fully or accurately explain many of them; using terminology, though sometimes inaccurately or inappropriately; and/or incorporating some key claims/points but failing to explain the reasoning behind them or doing so inaccurately. Elements of the required response may also be lacking. |
40 points out of 50: The essay illustrates solid understanding of the relevant material by correctly addressing most of the relevant content; identifying and explaining most of the key concepts/ideas; using correct terminology; explaining the reasoning behind most of the key points/claims; and/or where necessary or useful, substantiating some points with accurate examples. The answer is complete. |
50 points: The essay illustrates exemplary understanding of the relevant material by thoroughly and correctly addressing the relevant content; identifying and explaining all of the key concepts/ideas; using correct terminology explaining the reasoning behind key points/claims and substantiating, as necessary/useful, points with several accurate and illuminating examples. No aspects of the required answer are missing. |
Use of Sources (worth a maximum of 20% of the total points). |
Zero points: Student failed to include citations and/or references. Or the student failed to submit a final paper. |
5 out 20 points: Sources are seldom cited to support statements and/or format of citations are not recognizable as APA 6th Edition format. There are major errors in the formation of the references and citations. And/or there is a major reliance on highly questionable. The Student fails to provide an adequate synthesis of research collected for the paper. |
10 out 20 points: References to scholarly sources are occasionally given; many statements seem unsubstantiated. Frequent errors in APA 6th Edition format, leaving the reader confused about the source of the information. There are significant errors of the formation in the references and citations. And/or there is a significant use of highly questionable sources. |
15 out 20 points: Credible Scholarly sources are used effectively support claims and are, for the most part, clear and fairly represented. APA 6th Edition is used with only a few minor errors. There are minor errors in reference and/or citations. And/or there is some use of questionable sources. |
20 points: Credible scholarly sources are used to give compelling evidence to support claims and are clearly and fairly represented. APA 6th Edition format is used accurately and consistently. The student uses above the maximum required references in the development of the assignment. |
Grammar (worth maximum of 20% of total points) |
Zero points: Student failed to submit the final paper. |
5 points out of 20: The paper does not communicate ideas/points clearly due to inappropriate use of terminology and vague language; thoughts and sentences are disjointed or incomprehensible; organization lacking; and/or numerous grammatical, spelling/punctuation errors |
10 points out 20: The paper is often unclear and difficult to follow due to some inappropriate terminology and/or vague language; ideas may be fragmented, wandering and/or repetitive; poor organization; and/or some grammatical, spelling, punctuation errors |
15 points out of 20: The paper is mostly clear as a result of appropriate use of terminology and minimal vagueness; no tangents and no repetition; fairly good organization; almost perfect grammar, spelling, punctuation, and word usage. |
20 points: The paper is clear, concise, and a pleasure to read as a result of appropriate and precise use of terminology; total coherence of thoughts and presentation and logical organization; and the essay is error free. |
Structure of the Paper (worth 10% of total points) |
Zero points: Student failed to submit the final paper. |
3 points out of 10: Student needs to develop better formatting skills. The paper omits significant structural elements required for and APA 6th edition paper. Formatting of the paper has major flaws. The paper does not conform to APA 6th edition requirements whatsoever. |
5 points out of 10: Appearance of final paper demonstrates the student’s limited ability to format the paper. There are significant errors in formatting and/or the total omission of major components of an APA 6th edition paper. They can include the omission of the cover page, abstract, and page numbers. Additionally the page has major formatting issues with spacing or paragraph formation. Font size might not conform to size requirements. The student also significantly writes too large or too short of and paper |
7 points out of 10: Research paper presents an above-average use of formatting skills. The paper has slight errors within the paper. This can include small errors or omissions with the cover page, abstract, page number, and headers. There could be also slight formatting issues with the document spacing or the font Additionally the paper might slightly exceed or undershoot the specific number of required written pages for the assignment. |
10 points: Student provides a high-caliber, formatted paper. This includes an APA 6th edition cover page, abstract, page number, headers and is double spaced in 12’ Times Roman Font. Additionally, the paper conforms to the specific number of required written pages and neither goes over or under the specified length of the paper. |
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