Reference no: EM133174663
Case Study
Erik Lie and Randall Heron, two University of Iowa associate professors in finance, conducted a research study in 2005 that determined that many Chief Executive Officers (CEOs) were manipulating their stock-option accounting rules in order to increase their annual salaries. In fact, Lie and Heron found that upwards of 29 percent of all public corporations have major stock-option irregularities. Basically, organizations were delaying their stock paperwork for months in an attempt to look back and select the most lucrative dates for reporting, which is a violation of federal law. Lie and Heron found a way to actually determine whether or not an organization was perpetuating this type of fraud. When the researchers realized what they had found, they contacted the United States' Securities & Exchange Commission and showed The Wall Street Journal how to use options records to look for fraud.
As a result of their research, Lie and Heron established a consulting firm that examines whether accounting irregularities are simple paper-work mistakes or something more fraudulent. The two make more than $400 an hour examining corporations' accounting records and working with plaintiffs' lawyers as expert witnesses. In a world where CEOs are often being led out of their corporations in handcuffs, organizations and lawyers are forced to take Lie and Heron's research findings very seriously.
Question 1. While this specific case study examines accounting problems, do you think there are any communication problems that can lead to lawsuits?
Question 2. Do you think a university researcher should be able to financially profit from her or his research?
Question 3. While more than 2,000 organizations have been found to have options irregularities, Lie and Heron suspect that some of those organizations may be innocent. Could putting their research out into the public have a negative effect on innocent organizations? Do you think putting innocent organizations under more scrutiny in order to find guilty organizations justifiable?
|
Aware of potential ethical problems
: It is essential to be aware of potential ethical problems that may arise in practice.
|
|
Depth and breadth-organization leadership and mission
: Leadership and management competencies in a variety of organizational settings. Alignment between an organization's leadership, mission and values, organization
|
|
Why do you think individuals in the united states
: Why do you think individuals in the United States and Spain consider salary more important than the interesting nature of their job?
|
|
Ethical leadership and management theories
: The Yukl (2013) text for its practical discussion on ethical leadership. Also, reflect on the important leadership and management theories
|
|
Find guilty organizations justifiable
: While this specific case study examines accounting problems, do you think there are any communication problems that can lead to lawsuits
|
|
What is meant by product diversification
: 1) What is meant by product diversification? Explain with example. 2) what is the difference between mergers and acquisitions
|
|
What is the purpose of requiring insurers
: Ashley is an actuary who is employed by the Nebraska Department of Insurance. Her duties include monitoring the financial position of insurance companies doing
|
|
What were tucker innovations in new automobile
: What were Tucker's innovations in his new automobile? Where did Tucker get these ideas?
|
|
How much income tax expense will farmers inc report
: For the quarter ending June 30, 2022, Farmers, Inc. reported Pre-Tax Income of $ 5,000,000, How much Income Tax Expense will Farmers, Inc report
|