Ethics: Manipulating Data to Reach Target Cash Flow. Country Market, Inc., sells food and beverage products at its five retail stores. The company’s fiscal year ends on December 31. The company’s president and CEO, Jean Williams, just received a draft of the statement of cash flows from the controller, Stan Walker. Jean is very interested in the results since a significant part of her annual bonus depends on generating at least $400,000 in cash from operating activities. A summary of the statement is provided in the following:
Becky Swanson, the chief financial officer (CFO) for Country Market, is approached by Jean:
a. What impact did the reclassification of cash flows have on the total net increase in cash? Explain.
b. Are Becky’s actions ethical? Explain.
c. If you were the CFO, how would you handle Jean’s request? (If necessary, review the presentation of ethics in for additional information.)