Legal Issues and Laws
Yes there are a few federal laws that Excello needs to follow for the reporting of these transactions legally and correctly into their financial statements. Most important are the Sarbanes-Oxley act, the AICPA Code of Conduct and the Generally Accepted Accounting Principles. The accounting team has been asked to find ways around the system but the team needs to take into account that these laws and regulations have been made in their best interest for them ethically and for their clients’ future in business.
The CFO of Excello wants to put the sale of equipment in the end of the year so that it is counted on this year’s income however the company purchasing the equipment does not have the space to hold the merchandise until after the first of the year and therefore will not make the purchase until then which then does not allow for the dollar amount to be reported until next year’s books. Unethical practices that could take place here are recording the sale before it actually takes place. The provisions to these are Section 302 corporate responsibility for financial reports. [continues]
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