Before investors, lenders, and prospective customers associate with a company they will consider the company's financial reports and try to project the future profitability of a company. Current and prospective employees are also incentivized by potential profit sharing of a successful company. These and other factors serve as reasons for a company to manipulate financial reports to project unrealistic or even false earnings. Provide an example of a company that has previously committed financial fraud. Answer the following questions when considering the surrounding circumstances of the company:

1. Is it ever ethical or necessary for a company to manipulate their profitability? Why or why not?
2. What might have caused this company to have to manipulate financial information?
3. What was the ultimate outcome for this company?