You are CEO of Rattlesnake Brewing Co., an owner of a national chain of brew pubs. The
Question:
You are CEO of Rattlesnake Brewing Co., an owner of a national chain of brew pubs. The company is listed for trading on the NASDAQ. Two weeks before the company’s quarterly report is due to be filed with the SEC, you receive a visit from a junior member of the accounting department. Describing herself as a “whistleblower,” she informs you that the company’s draft financial statement significantly understates the cost of hops (an important ingredient of beer), which have been recorded at the contractual cost even though the supplier has gone out of business and the company has had to purchase hops at a higher cost on the market. The employee says that she reported the discrepancy to her supervisor, who told her to focus on her assigned responsibilities and not to worry about how costs are reported. You immediately consult your CFO, who says she knows nothing about this and describes the “whistleblower” as mentally unstable. However, you notice that the CFO seems a little evasive. She promises to look into the matter. A few hours later she calls you back and tells you that there is nothing to the story: The purported whistleblower just misunderstood the company’s system for cost accounting. What should you do?
Step by Step Answer:
The Law Of Governance Risk Management And Compliance
ISBN: 9781454881988
2nd Edition
Authors: Geoffrey Parsons Miller