Screen Microtech Inc.
(4 pages of text)
Case (Gen Exp)
Screen Microtech Inc., a capacitive touch screen manufacturer, had seen significant growth over the past year: it had moved its manufacturing plant, expanded operations, built a larger client base and seen an unprecedented increase in sales. Its chief executive officer was preparing an initial public offering that could lead to a significant bonus and stock shares for himself and for the company’s chief financial officer. This could be enough to induce them to secure improved financial results through any means necessary. Certainly, it could bias their approach to accounting policy choices. Was the company’s accounting ethical? Did it feature earnings management or earnings manipulation? What was the difference between the two, if any? What was the effect of such accounting practices on the financial markets?
This case is written for an introductory MBA course but could be used with a mature undergraduate audience. After completion of the case, students should be able to understand:
- Provision for returns and bad debts.
- Gain on sale of an asset.
- The application of different methods of depreciation.
- Write-offs and reversals due to unforeseen events.
United States, Medium, 2015
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