Unit 8 Assignment 2:

Read the textbook scenario (BYP18-7) and address the rubric questions located below:

Dave Schonhardt, president of Schonhardt Industries, wishes to issue a press release to bolster

his companys image and maybe even its stock price, which has been gradually falling. As

controller, you have been asked to provide a list of 20 financial ratios along with some other

operating statistics relative to Schonhardt Industries first quarter financials and operations. Two

days after you provide the ratios and data requested, Steven Verlin, the public relations director

of Schonhardt, asks you to prove the accuracy of the financial and operating data contained in

the press release written by the president and edited by Steven. In the press release, the

president highlights the sales increase of 25% over last years first quarter and the positive

change in the current ratio from 1.5:1 last year to 3:1 this year. He also emphasizes that

production was up 50% over the prior years first quarter. You note that the press release

Unit 8 Assignment 1-Lab

Grading Rubric: Points are earned based on

correct and thorough responses to the

Checklist items.

Percentage Possible Points Points Earned

Exercise 25-3 33% 7

Exercise 25-4 33% 7

Exercise 25-6 34% 7

Subtotal: 100% 21

Total Points Possible points

total: 45 points

Total Points

Earned:

contains only positive or improved ratios and none of the negative or deteriorated ratios. For

instance, no mention is made that the debt to assets ratio has increased from 35% to 55%, that

inventories are up 89%, and that while the current ratio improved, the acid-test ratio fell from 1:1

to. 5:1. nor is there any mention that the reported profit for the quarter would have been a loss

had not the estimated lives of Schonhardts plant and machinery been increased by 30%.

Steven emphasizes, The prez wants this release by early this afternoon.

Unit 8 AssignmentPart 2 Grading Rubric

In a 23 page APA formatted and citation styled essay address the following

checklist items after researching the Accounting Code of Conduct, IMA code of

Conduct, and reviewing the ethical approaches tutorial:

Possible

Points

Points

Earned

Specific Paper Objectives: Assignment Checklist (80%):

1) Who are the stakeholders in this situation? 4

2) Apply two or more accounting codes of conduct to answer the following

questions:

a. Is there anything unethical in president Schonhardts actions?

b. Should you as controller remain silent? Does Steven have any

responsibility?

7

3) Compare your response to the questions that involved accounting code of

conduct to the ethical approaches in the tutorial.

a. Which accounting code of conduct responses to questions a and b

above would be supported by two of the ethical approaches in the tutorial?

Explain.