ACC 573 AAU Cubic Company Financial Statement Restatement and Ethics Discussion

User Generated

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Business Finance

ACC 573

Academy of Art University

ACC

Description

Financial Statement Restatement and Ethics

Instructions

Search the Internet or Strayer databases for a company with a financial restatement from within the last 12 months. Use the research you conducted to complete this assignment according to the instructions below.

Write a 3–4 page paper in which you:

  1. Evaluate the contributing factors to the financial statement restatement. Explain how management could have avoided the issue and restatement.
  2. Assess the impact of the restatement on the company's stock price by comparing the stock price immediately before the announcement of the restatement and immediately after the restatement announcement. Explain whether the change in stock price was justified. Support your position.
  3. Explain management's role in the restatement, including any potential ethical violations based on the requirements of the Sarbanes-Oxley Act. Offer suggestions to management to assist them in avoiding similar problems in the future. Provide support for your recommendations.
  4. Use at least two quality academic resources in this assignment. Note: Wikipedia and similar websites do not qualify as academic resources. You have access to Strayer University’s Online Library and the iCampus University Library Research page.

This course requires the use of Strayer Writing Standards. For assistance and information, please refer to the Strayer Writing Standards link in the left-hand menu of your course.

The specific course learning outcome associated with this assignment is:

  • Evaluate a financial statement restatement and its impact on stock prices and managerial responsibilities related to ethics.

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Explanation & Answer

Attached.

Running Head: ACCOUNTING

1

Accounting
Student’s Name:
Institutional Affiliation:

ACCOUNTING

2
Question 1

In this assessment, I choose Cubic Company. It is an American public company offering
diversified systems and services to the defense and transport markets globally through two
business segments, namely Cubic Mission and Performance Solutions and Cubic Transportation
Systems. Various factors are associated with the 2020 financial statement restatement in Cubic
Company. For instance, the use of cost to cost percentage of completion method of accounting
by the corporation. The use of formulary modifications then adjusted the strategy. Under this
strategy, sales and profits accumulated are based on the total cost ratio to the cumulative
approximated costs at completion (Cubic Corporation, 2020). In that regard, Cubic Corporation
has utilized the strategy in calculating percentages of numerous contracts that have had an effect
on changing the portion of the indicated revenues and profits.
Additionally, there is a variation in GAAP accounting principles since there no utilization
of the formulary calculation to adjourn a partition of the stipulated profits and revenue the
contracts. The corporation came to the inference that despite the accoun...


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