. What are the most important contributions by Galileo in the history of physics? Why do you think so? How do these contributions affect your life? Your journal entry must….
approving or not approving loans.
If you were to enter the banking industry you may find yourself approving or not approving loans. The following is a good example of a common event you may encounter.
Company X is looking for a $100,000 to purchase new equipment. The finance manager for Company X recently presented financial reports. Upon further analysis of the statements you, the banker, noted some window dressing of the financial statement. In this case it seems Company X will delay payments to vendors in order to make their cash position look higher.
- Do you see this practice a matter of ethical and or legal concern?
- Do you think most all company’s “window dress” their data?
Please explain your decision to approve or disapprove Company x’s loan.
From the professor:
To answer this question think of the primary duties company officers owe to shareholders. That main duty is to “Improve shareholder value”. So here are some questions for you.
· Does management’s window dressing financial statement, to attract new investors, improves shareholder value?
· Is shareholder value improved through financial statement window dressing to obtain lower loan rates?
· Does a window dressing financial statement to lower tax rates (and payments) improve shareholder value?
From my life experience, I look at this to be the same as dating. On most of the dating web sites women state that they want an honest man. So I asked a woman I had begun dating where the honesty line is for women? You are not that tall, I told her, without heals. You look a lot better with make-up. Your hair is not that color naturally. And (well you get the idea). LOL
I was told by that woman that the things women do to attract men is not dishonest but simply a matter of packaging.
So the question here is: When managers window dresses financial statements what is packaging and what is dishonest? Who determines the line? How can a manager be honest about financial reporting and still fulfill his fiduciary duties? What should a manager do here?