ACG 2011 Discussion

Part 2: Do some research and find an article that discusses ESG (environmental, social and governance) and why ESG is becoming of significant interest to companies, their investorsand other stakeholders. Discuss what you agree and/or disagree with in the article and what types of policies companies can implement to reach their ESG goals.

Tips:-Consider how these initiatives impact accounting firms in addition to all firms in all industries

-Consider the impact that ESG issues have on all stakeholders, such as customers, employees, investors etc.

Part 2 #2 You have just been hired as a manager of ABC Company. Your first week on the job you are asked by upper management to review payroll. You notice the company is not paying any payroll taxes but there are a handful of individuals who are receiving checks from the company. You ask the payroll director why there are no taxes paid and he states that all of the workers are considered independent contractors. What would you do in this case? Consider potential differences with how a company reports, pays or handles payroll taxes for an independent contractor versus an employee.

Tips: Consider researching the IRS’s rules relating to how to distinguish independent contractors from employees.

-Consider why the IRS or state governments would care if an employee was misclassified.

-Feel free to share what impacts you think COVID-19 has had on the way that companies classify workers.

Part 3: This week we cover bond financing. Often times when large amount of funds are needed for a project or expansion, companies and governments seek financing to help pursue these projects. Define what a bond is and discuss the advantages and disadvantages of bond financing, such as those covered in your chapter. Consider discussing why a company might choose to issue a bond instead of stock, a form of equity financing. Be sure to cite any sources used, including the textbook.

Tips-Consider what types of traditional financing a company can obtain as another alternative. Which of these choices (traditional loans, bond financing or equity financing) do you think seems the best approach? Is there a time when one is preferred?

-How is financial reporting different under either route?

-Will investors be more interested in one alternative or another? For example, would they prefer investing in bonds or in stock?

Part 3 #2Running a business presents challenges such as managing finances from a broad scale, including ensuring the bills are paid, credit is not misused, and keeping the doors open. In downturns of the economy, there are challenges that business owners face which may cause them to be unable to maintain their commitments or meet their financial obligations. If you were an employer who came upon difficult times, how would you handle such a situation? Do you think there are ways to combat such challenges without having to lay off employees or shut down entirely? Discuss the ethical concerns this might present.

-In your response feel free to discuss the impacts you have experienced or seen in response to COVID-19.Part 4: Discuss the importance of measuring cash flows for a business. How could a manager benefit from using a Statement of Cash Flows on a routine basis (e.g. what types of policies or routine analysis could be implemented)? What considerations should be made relating to noncash activities that may not appear directly within the Statement of Cash Flows but rather in the notes? Give specific examples where useful.

-For an additional detailed overview of how to prepare the Statement of Cash Flows and what each section includes, consider reviewing the following video:

“Statement of Cash Flows Explained.” (2013).

Part 4# 2: Common tools of financial statement analysis such as horizontal analysis, vertical analysis and ratio analysis have helped to uncover fraud by identifying amounts that are out of line with expectations. Discuss how these tools can help to identify fraud schemes early and whether they are useful in preventing frauds overall.

-Recall that the goal of financial statement analysis is to:

• make informed decisions about a company (investors, creditors, lenders)
• helps managers in managing day-to-day operations
• assists with making comparisons to competitors or others in the industry
• helps determine financial health

-We look at our analysis within the same year (vertical analysis) or from period to period (horizontal analysis).