Many companies have been affected during the COVID-19 global pandemic. In particular, Starbucks Corporation (NASDAQ: SBUX) noted in its annual report, “Our financial results have been and could continue to be adversely affected by the impact of COVID-19 pandemic, which has resulted in a disruption of customer routines, changes to employer “work-from-home” policies, reduced business and recreational travel, and changes in consumer behavior.”

Visit http://www.pearsonhighered.com/Horngren for a link to Starbucks Corporation’s annual report for the year ending October 3, 2021.

Requirements 

1. Suppose you are the chief financial officer (CFO) responsible for the financial statements of Starbucks Corporation. Why is it important to disclose the adverse impact COVID-19 has had on Starbucks Corporation’s business and financial results? 

2. What are some of the negative consequences to Starbucks Corporation for not telling the truth? What are some of the negative consequences to Starbucks Corporation for telling the truth?