SCENE 6: CONVERSATION WITH ROSS TRELA, LATHAM ASPER, AND LESTER DARNAL -

The three men are prepping for the upcoming board meeting where they will discuss the accounting information discovered in the email that has the potential to result in a restatement of prior period financial statements. CEO Shep LeDuc has been asked to sit out this board meeting so that the board can have a candid discussion about the situation at LDC.

Respond to the following questions ensuring you provide examples and concepts from our lessons.

1)What are the key decisions facing the Board of Directors (for example: do they need to restate financial statements from prior periods?)

2) What does "governance" mean when it comes to fraud detection, prevention and investigation? Is LeDuc a good chief executive for LDC? How about CFO Arizmendi? What responsibility does Arizmendi have in these events? Why is the CEO being asked to sit out this board meeting?

3) Should the company delay filing the quarterly financial report until there is a determination about the materiality of the questionable accounting estimates highlighted in the email attachment?