1 paragraph respond to 2 Colleagues

Running head: ACCOUNTING DISCUSSION 1

ACCOUNTING DISCUSSION 2

Accounting Discussion

Name

Institutional Affiliation

Accounting Discussion

The organization I will be using for this discussion is Diamond Foods. Diamond Foods major goal was to become a major competitor in the industry. And it did so by engaging in questionable and unethical behavior. The leaders of the company implemented deceitful Accounting practices and attempted to monopolize the market which led to defrauding investors and resulted in falsified annual growth rates and earnings.

There were different reasons for the company’s problems. However, the biggest was the flaws in leadership. The main aim of the leaders in such a competitive market was to be a success at any cost. This clouded their decision making which led to a work environment which allowed illegal activities that later influenced the processes of an up and coming snack food giant. There were many warning signs such as a jump in profit margins, unusual timing of payments, and volatile inventories and cash flows. The top leaders and managers were not ethical and did not set examples for the employees. As a result, internal controls were not met due to not having clear guidelines. The steps in addressing the unethical behavior in the company would be the creation of more strict policies, ethical training on leadership, and internal audits. The auditors are required to be more diligent and more mindful to make sure that the integrity of reported financial statements is met.

As a manager of the organization, I would introduce corrective measures which included defined procedures with different levels of approvals, Robust Accrual Accounting practices, proper Accounting for Walnut growers, and improving the internal controls environment to include ethics training, and making sure that all legally required guidelines are met. These measures should be implemented and documented immediately with training modules for employees yearly. Rather than making constant changes to the name of the payments to the walnut farmers, a single name should be decided upon and made permanent. Also, the issue with payments, the company should consider going back to the previous model of payment to prevent mispricing on financial statements.

Reference

Diamond Foods Recovers from Accounting Scandal. https://danielsethics.mgt.unm.edu/