Question: You arc an accountant for Lanthier Company Lanthier s president calls

You arc an accountant for Lanthier Company. Lanthier’s president calls you into the office and say's, “YVc have to find a way to reduce our pension casts. They are too high, and they' are making us uncompetitive against our foreign competitors whose employees have state-funded pensions. 1 think we might have to abandon our defined benefit plan, but I know the employees would not be happy about that. I was also thinking that perhaps we could raise the discount rate we use up to the high end of the acceptable range. I also think we need a trustee who will pursue a more aggressive investment strategy for the pension funds; that way we can raise our expected rate of return.”
From financial reporting and ethical perspectives, discuss the issues raised by this situation.

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  • CreatedOctober 05, 2015
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