1. Why do financial analysts look at measures such as EBITDA and operating free cash flow to evaluate financial results? How do these measures differ from accrual earnings? Do you believe auditors should be held responsible for auditing such information?
2. Given the major stakeholders mentioned in the Vivendi case, evaluate the ethics of actions taken by Messier and Hannezo as it affected stakeholder interests. Consider in your answer the fiduciary obligations of these managers.
3. Evaluate the accounting issues discussed in the case from the perspective of Schilit’s financial shenanigans. Which of the various accounting decisions made by Vivendi through Messier and Hannezo can be categorized as one of the shenanigans?