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Sarah Grant is the CFO of Frame Tec, Inc., a large regional construction contractor with approximately 300 employees. The owners are exceptionally kind and intelligent carpenters who worked their way up in the business world through hard work and solid ethics. Sarah has enjoyed working with them for more than 10 years. They have accepted her as an essential part of the upper management team, and they rely on her judgment. Sarah and the upper management team had a rough stretch about a year ago. Against Sarah's strongest recommendations, the owners decided to buy lumber directly from lumber mills and hired Jack Jones, a lumber professional, to handle the purchasing. Prior to this, Frame Tec utilized the services of resellers. Resellers usually provide fixed bids for lumber pricing when a project is estimated. They hold their prices and normally bear the risk for changing market conditions.
Problem 1: What accounting standards and ethical guidelines are available to Sarah?
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