Chapter 1, Problem 19.1EC

An ethical problem may arise for a company expert who is trying to address the needs of people who are interested in financial information.

Explain some of the basic assumptions of CVP analysis and why this is used in managerial accounting? Why do management accountants use sensitivity analysis and provide an example of how this would be used (use a real publicly traded company)?

Crazy Eddie focused on making the company look extremely profitable just prior to the IPO. Why was this important? Does this make a client that is in the process of issuing an IPO a higher-risk client? Why or why not? Are there other risks to the auditor when an IPO is included in the engagement?

A well-run company should align the management’s interest and with the owner’s interests. What are some actions that stockholders can take to ensure that management’s and stockholders’ interests are aligned?  Is this important?  What are some of the risks/consequences if the management’s interests are not aligned with the owners?

Discuss the role of management accountant in the current business environment. Your answer should include a discussion, with illustration, on how the management accountants support the management functions.

Can you please discuss the extent to which Corporate Governance codes, rules and regulations satisfy the need from all stakeholders for effective management of companies.

what are some of the key strategic functions of the CFO in the current world of business? How does the role of the CFO differ from that of a company controller? Does every company require a full-time CFO? provide examples

Suppose you were a member of Company X’s board of directors and chairman of the company’s compensation committee. What factors should your committee consider when setting the CEO’s compensation? Should the compensation consist of a dollar salary, stock options that depend on the firm’s performance, or a mix of the two?               3.If “performance” is to be considered, how should it be measured? Think of both theoretical and practical (that is, measurement)         considerations.

Who is the CFO, and where does this individual fit into the corporate hierarchy? Whatare some of his or her responsibilities?