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Individual Legality and Ethical of Corporate Governance

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Submitted By ahiggy81
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Week 3: Individual Legality and Ethicality of Corporate Governance
Alisha J. Simental
March 6, 2014
Katherine Parks

Introduction In Case 3-3, we are introduced to the United Thermostatic Controls," that engages in the manufacturing and marketing of residential and commercial thermostats."(S. Mintz, R. Morris, 2011) They use their thermostats control temps in refrigerators and furnaces, mainly selling to retailers. According to the text, economic conditions and the reduction of demand has created internal problems and tension to still achieve target revenues. In addition, the sales department is feeling the pressure to increase or expand earnings. The internal auditor found two cases that did not follow correct procedures, because the accounting department recorded revenue for these earlier in order to meet the target revenue, due to pressure from Campbell the director of sales division. In this paper I am going to discusses the legal activities, criteria of SOX act, ethical activities, and decide on the best nest step decision.
Legal Activities The two shipments made up about 150,000 in revenue and were the main concern for the internal auditor. In the first shipment United ship the product on the 31st of December even though the company, Allen did not want it delivered before the 1st of February due to not needing it until the 1st of March. In the second shipment, the company shipped a partial shipment to Bilco Corporation on the 30th of December even though they stated partial shipments would not be accepted and the schedule full shipment should of not been shipped till the 1st of February. According to State and Federal law none of the activities actually seemed to violate or break any laws. In both cases, the company did not ship to another place or offered a full return but just sent the product to the customer early. Even though the…...

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