Ethics Case of Managerial Accounting (15 points) Edward Saylor is the president of Ramon Company, a company whose stock is traded on a national exchange. In a meeting with investment analysts at the beginning of the year, Saylor had predicted that the companys earnings would grow by 20% by this year. Unfortunately, sales have been less than expected for the year, and Saylor concluded within two weeks of the end of the fiscal year that it would be impossible to ultimately report an increase in earnings as large as predicted unless some drastic action was taken. Accordingly, Saylor has ordered that wherever possible, expenditure should be postponed to the new year ----including canceling or postponing orders with suppliers, delaying planned maintenance and training, and cutting back on end-of- year advertising and travel. Additionally, Saylor ordered the companys controller to carefully scrutinize all costs that are currently classified as period costs and reclassify as many as possible as product costs. The company is expected to have substantial inventories at the end of the year. Required: 1. Why would reclassifying period costs as product costs increase this periods reported earnings? Please review Chapter 2. (3 points) 2. Do you believe Saylors actions, such as postponing and canceling expenditures, are ethical? Why or why not? Please cite the ethical standards (such as competence, integrity, credibility and confidentiality) to support your opinion. (3 points) 3. Do you believe Saylors action, such as reclassifying period costs as product costs, are ethical? Why or why not? Please cite the ethical standards (such as competence, integrity, credibility and confidentiality) to support your opinion. (4 points) 4. If you were the companys controller, what would you do? (5 points)

Prepare a brief case report for no more than 4 pages