Pendleton Automotive Corporation's Ethical Issues

This week's discussion is centered on the case scenario presented in the EC $17$

Ethics Case.

Since cash is the most important asset in a firm, success of a firm can be directly

traced to its cash management. Though reliance on cash flows to the exclusion of

accrual accounting is discouraged, comparing cash from operations to net income

can reveal important information about the "quality" of reported net income.

Please review the EC $17$ Ethics Case scenario on page $17-57$ in your text and

answer the following questions.

$.$ Who are the stakeholders in this situation?

$.$ Was there anything unethical about the president's actions? Explain.

$.$ Was there anything unethical about the controller's actions? Explain.

$.$ What is the impact of reclassifying the $2-$year notes payable to an account

payable? Explain with examples.

$.$ What is the other financial statement that must be reclassified in this case?

Explain with examples.

$.$ Who do you think might discover the reclassification and correct it$?$

Explain.