Paul Satorius Is the Controller at ANEW Corporation

question 69

Essay

Paul Satorius is the controller at ANEW Corporation.The company is not publicly traded.ANEW Corporation just received a patent on a new product that is supposed to revolutionize the music industry.As the moment,however,ANEW Corporation is experiencing financial difficulties and is on the verge of defaulting on a note held by the bank.
At the end of the most recent fiscal year,the company's president instructed Paul to ignore recording some invoices.Paul objected because the invoices represented true liabilities at fiscal year end.However,the president insisted that the invoices should be recorded next year so that current liabilities reported on the balance sheet at the end of the current year are lower.The bank is closely following the amount of current liabilities reported by ANEW Corporation as an indicator of solvency.
Required:
What should Paul do? Follow the guidelines offered by the IMA.

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Definitions:

Right Cerebral Hemisphere

The half of the brain that is typically associated with creativity, spatial ability, visual imagery, and the processing of music and nonverbal content.

Mirror Neurons

Neurons that fire both when an individual acts and when the individual observes the same action performed by another, thought to play a role in learning, empathy, and understanding others' actions.

Motor Skills

The abilities required to control the large and small muscles of the body for movements such as walking, running, holding, and writing.

Mathematical Calculations

The process of using mathematical techniques and formulas to solve problems or find precise answers.