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Financial & Managerial Accounting 3rd Edition by Charles Horngren,Harrison, Walter,Suzanne Oliver
Edition 3ISBN: 978-0132962339Financial & Managerial Accounting 3rd Edition by Charles Horngren,Harrison, Walter,Suzanne Oliver
Edition 3ISBN: 978-0132962339 Exercise 1
The tobacco companies have paid billions because of smoking-related illnesses. In particular, Philip Morris , a leading cigarette manufacturer, paid over $3,000,000,000 in one year.
Requirements
1. Suppose you are the chief financial officer (CFO) responsible for the financial statements of Philip Morris. What ethical issue would you face as you consider what to report in your company's annual report about the cash payments What is the ethical course of action for you to take in this situation (Challenge)
2. What are some of the negative consequences to Philip Morris for not telling the truth What are some of the negative consequences to Philip Morris for telling the truth (Challenge)
Requirements
1. Suppose you are the chief financial officer (CFO) responsible for the financial statements of Philip Morris. What ethical issue would you face as you consider what to report in your company's annual report about the cash payments What is the ethical course of action for you to take in this situation (Challenge)
2. What are some of the negative consequences to Philip Morris for not telling the truth What are some of the negative consequences to Philip Morris for telling the truth (Challenge)
Explanation
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2.
Step 1 Read the exercise.
Step 2 Describe the negative consequences of not disclosing the cash payments for smoking - related illnesses.
Negative consequences are as follows: If users of the financial statements feel they are only getting part of the truth, or that the reports are distorting the information, that will damage the credibility of the company, and damage the company's reputation.
Negative consequences of telling the truth include painting so bleak a picture of the effects of smoking those investors will view Philip Morris as too risky and stop buying the company's stock. Another negative consequence would be to create the impression that the company is engaged in unethical behavior by selling a product that damages people's health.
Step 1 Read the exercise.
Step 2 Describe the negative consequences of not disclosing the cash payments for smoking - related illnesses.
Negative consequences are as follows: If users of the financial statements feel they are only getting part of the truth, or that the reports are distorting the information, that will damage the credibility of the company, and damage the company's reputation.
Negative consequences of telling the truth include painting so bleak a picture of the effects of smoking those investors will view Philip Morris as too risky and stop buying the company's stock. Another negative consequence would be to create the impression that the company is engaged in unethical behavior by selling a product that damages people's health.
Financial & Managerial Accounting 3rd Edition by Charles Horngren,Harrison, Walter,Suzanne Oliver
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