Until recently, the SEC was reluctant to hit companies with big fines for wrongdoing because the penalties
Question:
The SEC wants a series of objective measures so there can be continuity from case to case. Many believe a good starting point is whether a company benefited from its wrongdoing, in which case fines would be higher. Commissioners also debated how much credit a company should get for cooperating with the SEC, in which case fines would be lower. Some individuals argue that any signposts will be better than today's unmarked landscape.
Instructions
With a group of students identified by your instructor, write a one-page discussion that uses Exhibit 21-1 to identify how SEC policies have the potential to change managers' decision processes. In particular, focus on decisions managers make when considering whether to commit fraud. Consider the relevant costs and earnings that managers might consider in making this type of decision. Use the ideas in this chapter that are related to what is relevant to a particular decision to help with your analysis. In the conclusion of your paper, state whether your group thinks objective measures for fines will change the decision processes of managers who are considering fraud.
In Exhibit 21-1
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Related Book For
Financial and Managerial Accounting the basis for business decisions
ISBN: 978-0078111044
16th edition
Authors: Jan Williams, Susan Haka, Mark Bettner, Joseph Carcello
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