First go through Chapter 7 powerpoint slides that I uploaded so you can understand the chapter. Then read Case 7-8 that is in the zip file. After reading Case 7-8: Monsanto Company Roundup, post your answers to the following questions in the second Chapter 3 discussion forum. Be sure to support and explain your answers. Answers to questions should not be less than 100 words.
1. What is the underlying accounting and financial reporting concept at issue as described in EITF Issue No. 01-9 with respect to the way Monsanto accounted for customer rebates? Explain in your own words how Monsanto’s accounting led to materially misstated financial statements.
2. Given that Monsanto was under great pressure from competitors that sold generic brands similar to Roundup, would you characterize the Monsanto situation as a business failure, an accounting failure, and/or an audit failure? Explain.
3. Of what value are the ethics and compliance requirements agreed to by Monsanto? Do you believe all companies that experience financial fraud should be required to institute such changes? Can such requirements change the culture of a global company such as Monsanto? Explain.
4. Do you believe restated financial statements should be audited by a different firm than the one that prepared the original financials? Why or why not? Consider costs and benefits in your analysis.
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