The Securities and Exchange Commission (SEC) found that Centerpulse, Ltd., a publicly traded company based in Switzerland, fraudulently misstated its 2002 third and fourth quarter financial statements filed with the SEC. Visit the SEC Web site (www.sec.gov) and search the link to “Litigation Releases” to locate Litigation Release 20336 issued on October 17, 2007, against selected members of the Centerpulse management team. View the SEC Complaint in this matter to learn more about this fraud.

Required
a. What members of management were allegedly involved in the accounting fraud?
b. What were the primary incentives that allegedly pressured management to engage in the fraud?
c. What was the nature of the expense that management inappropriately delayed?
d. The complaint also notes that management failed to write-off an impaired asset. What were the circumstances resulting in the impairment?
e. By what percentage amount did these actions overstate Centerpulse’s 2002 pretax income?