Onwards and Upwards Corporation has paid cash dividends to its shareholders for eight consecutive years The board of directors ' policy requires that in order for a dividend to be declared, cash provided by operating activities as reported in the current year 's statement of cash flows must exceed ...

a A companys dividend policy should be based on several factors other than the requirement to pay the usual dividend Some of these factors include Leg ...

Onwards and Upwards Corporation has paid cash dividends to its shareholders for eight consecutive years. The board

Question:

Onwards and Upwards has paid cash dividends to its shareholders for eight consecutive years. The board of directors' policy requires that in order for a to be declared, cash provided by operating activities as reported in the current year's statement of cash flows must exceed $1 million. The job of president Phil Monat is secure so long as Phil produces annual operating cash flows to support the usual the end of the current year, controller Leland Yee informs president Monat of some disappointing news. The net cash provided by operating activities is only $970,000. The president says to Leland, "We must get that amount above $1 million. Isn't there some way to increase this amount?" Leland answers, "These figures were prepared by my assistant. I'll go back to my office and see what I can do." The president replies, "I know you won't let me down, Leland."
Upon close scrutiny of the statement of cash flows, Leland concludes that he can get net cash provided by operating activities above $1 million by reclassifying interest paid from the operating activities section, where it has been classified in the past, to the financing activities section. The company is a publicly traded company using IFRS. Leland knows that sometimes a major repair can be recorded as an asset rather than an expense. He returns to the president and exclaims, "You can tell the board to declare their usual Our cash flow provided by operating activities is $1,030,000." Excited, the president exclaims, "Good job, Leland! I knew I could count on you."
Instructions
(a) Should any other factors, besides net cash provided by operating activities, be considered by the board in setting the company's policy?
(b) Who are the in this situation?
(c) Was there anything unethical about the president's actions? Was there anything unethical about the controller's actions?
(d) Because the company reported under IFRS, could there be other ways to change the cash flow provided by operating activities? Are these options available under ASPE?
Stakeholders
A person, group or organization that has interest or concern in an organization. Stakeholders can affect or be affected by the organization's actions, objectives and policies. Some examples of key stakeholders are creditors, directors, employees,... Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may... Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...