Case Analysis - Lakeside Slammers Inc
Essay by Stella • June 20, 2011 • Essay • 358 Words (2 Pages) • 3,128 Views
Robin Abernathy
Case Study
April 26, 2011
On the basis of my revised financial statements of Lakeside Slammers, Inc., I would face a great ethical dilemma. The information regarding season ticket sales does not provide reliable information to an outsider, since you cannot count income from 2008 season ticket sales as revenue in 2007. The $100,000 listed as advertising revenue is inaccurate since it probably will not be realized due to the requirements that Lakeside average 2,000 fans per game, but they only averaged 1,500 per game. My fiduciary duty to the owners is to share this information honestly with them. It is also my duty to share this information with the bank.
The parties who may benefit or be harmed by this information are the owners and the bank. The owners could benefit by obtaining loans based on incorrect numbers, but they could also be harmed if the truth was to come out, and they could be prosecuted or their reputations damaged for the inaccurate information. The bank could be harmed by loaning money that it is unable to retrieve from the company.
The interests of the owners and the bank would be likely to come into direct conflict. While the owners may desire to obtain a loan from the bank, it would not be entitled to such a loan if their financial information changed drastically. Also, the interests of the controller and the owners appear to be in conflict since the controller tried to list his own personal residence as an asset. Under the economic entity assumption, the personal affairs of the owner of a business should not be intermingled with those of the company.
My responsibilities and obligations are to provide the most accurate information and to report fraud. I must provide the most useful, timely, and reliable information to decision makers, as well as providing information that most accurately represents what it claims to report, and that is free from bias toward any certain result.
I do not believe that the information provided by the organization is relevant, is reliable, or accurately represents what it claims to report, and is unbiased.
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