510 Research Project

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Looking Ahead, and Zoom Meeting Agenda

1. Let’s schedule an optional zoom session for next Friday, June 3rd 2022 at 5:30pm to review for mid-term and answer any questions you may have – I will circulate the Session ID by next Thursday, June 2nd, afternoon.

2. Review guidelines for your research analyses – Final research analyses due June 27th 2022. See the following slides for details.

3. Review for Mid-term exam: Four questions (one from each chapter 1-4) will be assigned by Next Monday, June. 6th Midnight for which answers must be submitted on blackboard by Sunday, June 12th 2022.

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Ethics Research Analyses – Due June 27th 2022

PWC publishes the CFO direct call “In the loop.” Below is an excerpt from a recent issue of In The Loop,

dated Apr 29, 2021

“The SEC introduced new disclosure requirements in August 2020 designed to provide stakeholders

insight into human capital—from the operating model, to talent planning, learning and innovation,

employee experience, and work environment. The disclosures may help stakeholders evaluate whether

a business has the right workforce to meet immediate and emerging business challenges and the

nature and magnitude of the related investments. However, there are questions as to what is required

to comply with the principles-based rules.

In certain SEC filings, a public company is now required to disclose:

• the number of employees and a description of its human capital resources, if material to the business

as a whole; and if material to a particular segment, that segment should be identified

• any human capital measures or objectives, if material, that the registrant focuses on in managing its

business, such as those related to the development, attraction, safety, engagement, and retention of

employees

Contd…

Research Topic Introduction - Equity, Diversity, and Inclusion (EDI)

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Ethics Research Paper – June 27th 2022

The rules do not include a definition of “human capital” or a list of required measures to disclose. The

principles-based approach (1) reflects an expectation that disclosures will be tailored to a company’s

own business or industry using management’s judgment and (2) allows for the disclosures to evolve in

response to changes in a company’s environment. The new rules, which are part of the SEC’s broader

project to modernize Regulation S-K, became effective November 9, 2020. As a result, 2020 Form 10-Ks

and other filings subject to Regulation S-K filed on or after this date need to include the new

disclosures……”

Additionally, in another article from. CFO Dive brief, the Senior Editor, Robert Freedman wrote that “The Securities and Exchange Commission (SEC) took 697 enforcement actions against companies in fiscal year 2021, the

agency announced. As a result of the actions, companies paid just under $2.4 billion in disgorgement and a record $1.4

billion in penalties. Many of the cases were aided by the agency’s whistleblower program, which paid out $564 million in

rewards to 108 insiders.

“As these results show, we go after misconduct wherever we find it in the financial system,” said SEC Chair Gary Gensler.

”[We’re] holding individuals and companies accountable, without fear or favor, across the $100-plus trillion capital

markets we oversee.” https://www.cfodive.com/news/697-companies-hit-with-sec-violations-in-fy-21/610576/

End of Articles

Research Topic Introduction

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Ethics Research Analyses – June 27th 2022

In this course, ACCT 510 - Business Ethics, we explore ethics, moral, and legal obligations.

Based on the new SEC’s diversity disclosure requirement you have just read, how are companies complying, or not

complying? Are companies’ ethical violations correlates to their propensity for other violations? Specifically, select any

4 publicly traded companies and review their most recent 10k for YE 2020 and 2021. Select the company’s diversity

disclosure languages. Then, compare and contrast the the four selected companies’ diversity narratives by answering

the following questions; 1. On one – two slides, first, in a few bullet points clarify your understanding of the SEC requirement. Then, two bullet

points to clarify if the SEC requirement represents an ethical, a moral, legal obligation or combination of these variables. Refer to Chapter 2, pp80, that describes the link between moral intensity and ethical decision making - Thomas Jones’ moral intensity model: Of Jones’ six dimensions or moral intensity which is most applicable to this SEC’s disclosure requirement of Public Companies. Provide a brief reason for your selected dimension(s).

2. On two slides, outline if any correlations exist between these companies’ levels of diversity disclosure (use the companies’ employees gender distribution, or other similar diversity index, as proxy for diversity); and their respective profitability- (Use Revenues, ROE, EPS, or Profit Margin Ratio as proxies for profitability) – That is, do you see any correlation between your selected companies’ diversity disclosure, and their respective profitability ?

3. On two slides, state if you think each company’s narrative on diversity disclosures (the language, its accuracy, the forthrightness and the details provided) are compliant?

4. On two slides, opine on the respective company’s degree of ethical practices (standards) relative to required diversity disclosure or lack thereof. Provide an example of how your conclusion was drawn - substantiate your position.

5. On two slides, (a) Provide summary points that rank order your choice of companies by ethical standards - Emphasize the reason(s) for the rank you assigned. (b)Can your findings predict a company’s propensity for ethical violation? Why? Or Why not?

6. On one slide, if you were hired as a consultant for the company with your worst assigned ranking above, what questions (provide at least two) would you have for the company’s management regarding ethical standards as it relates to the SEC’s diversity disclosure requirement.

Research Questions - Equity, Diversity, and Inclusion (EDI)

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Step 1. Select any four publicly traded companies – Submit the companies’ name for approval in the discussion forum labeled Public Companies – Students cannot select the same four companies, so verify the companies already selected by your cohorts before June 6th. 2022.

Once approved, by June 6th, obtain the most recent 10k (financial data and disclosures) for each company you have selected.

Step 2. Part- 1 Prepare Slides to Reflect the Company’s Background Information (2 points)

This section should include the following slides: I. Prepare two slides summarizing the companies’ profile (years in business, IPO date,

current chairman of the board, CEO, current CFO, total number of employees, and current external auditor(s))

I. Provide one slide of executive summary statistics reflecting the companies’ last two years of performances; show Gross Revenues and, net operating income from operations, ROE, and EPS – See sample slide next for example how to present

II. Step 3. Part- 2: Answer the questions 2- 5 on the previous slide. Overall, the final analyses should consist of 12 -16 slides only.

Ethics Research Analyses – June 27th 2022 Steps to complete the Research Analyses

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Example of How to Present Your Findings Company 1 Company 2 Company 3 Company 4

Evaluation Criteria YE- 2020

Y-E 2021 YE- 2020 Y-E 2021 YE- 2020 Y-E 2021 YE- 2020 Y-E 2021

Background Information : i. CEO – Highest Level of

education i. CFO – Highest Level of

education ii. Number of SEC Violations

Diversity analyses as follows: i. Total number of Employees ii. Number of female employees iii. Number of male employees iv. Diversity or EDI Index

Profitability analyses as follows: I. Gross Revenues II. Return on Equity (ROE) III. EPS IV. Profit Margin Ratio