Identify Jamie and Step Exercise 5 (Professional Ethics and End-of-Year Games) Jane Tan is the new division controller of the snack foods division of Yummy Foods. Yummy Foods has reported a minimum 15% growth in annual earnings for each of the past 5 years. The snack foods division has reported annual earnings growth of over 20% each year in this same period. During the current year, the economy went into a recession. The corporate controller estimates a 10% annual earnings growth rate for Yummy Foods this year. One month before the December 31 fiscal year-end of the current year, Tan estimates the snack foods division will report an annual earnings growth of only 8 percent. Louie Ryan, the snack foods division president, is less than happy, but he says with a wry smile, "Let the end-of-year games begin." Tan makes some inquiries and is able to compile the ollowing list of end-of- year games that were more-or-less accepted by the previous division controller: a. Deferring routine monthly maintenance in December on packaging equipment by an independent contractor until January of next year. b. Extending the close of the current fiscal year beyond December 31 so that some sales of next year are included in the current year. c. Altering dates of shipping documents of next January's sales to record them as sales in December of the current year. d. Giving salespeople a double bonus to exceed December sales targets. e. Deferring the current period's advertising by reducing the number of television spots run in December and running more than planned in January of next year. f. Deferring the current period's reported advertising costs by having Yummy Foods outside advertising agency delay billing December advertisements until January of next year or having the agency alter invoices to conceal the December date. 8. Persuading carriers to accept merchandise for shipment in December of the current year although they normally would not have done so. Required: 1. Why might the snack foods division president want to play the end-of-year games described above? 2. The division controller is deeply troubled and reads the Standards of Ethical Conduct for Management Accountants. Classify each of the end- of-year games (a - g) as (i) acceptable, or (ii) unacceptable according to that document. 3. What should Tan do if Ryan suggests that end-of-year games are played in every division of Yummy Foods and that she would greatly harm the snack foods division if she does not play along and paint the rosiest picture possible of the division's results