TO: Professor Tanae Williams
FROM: Raymond Lee
DATE: May 1, 2012
SUBJECT: Financial Statement Analysis - Discussion

I would imagine that the stakeholders in this case are Jack McClintock; President of McClintock Industries, Jeremy Phelps; Public Relations Director, Myself; Controller of McClintock Industries, and all of the stockholders of McClintock Industries, and any potential investors in McClintock Industries. President McClintock’s actions are unethical; the choice to only report the positive facts instead of the full truth is just as bad as covering up. For instance, no mention is made that the debt to total assets ratio has increased from 35% to 55%, that inventories are up 89%, and that while the current ratio improved, the acid-test ratio fell from 1:1 to 0.5:1 Weygandt, J., Kimmel, P., & Kieso, D. ,2011). So by only reporting what he chooses, President McClintock has left himself open for scrutiny in the future. As the Controller it is my responsibility to speak to President McClintock and let him know that although the report is correct, the presentation is wrong; plus I feel it is unethical to report only the positives without showing the negatives. As for Jeremy Phelps; he does have a responsibility to report what is given to him, but he has to know that he is still responsible for delivering the message and has to believe in it for it to be a sell to future investors.
References
Weygandt, J., Kimmel, P., & Kieso, D. (2011). Managerial Accounting, 5th edition. US: John
Wiley and