Another statement was released stating, “ " The announcement today wasn't a shock," said Esther Schreiber , who follows the company for Credit Suisse First Boston. Schreiber said she believes the company can return to profitability, but that attaining any significant growth will be difficult”(Beckett 10). Prior to the postponed release of Sybase’s financial reports, individuals already knew of the inappropriate account of sales. Whoever had been directly involved were in that moment resigning or had been dismissed immediately. Sybase’s problematic events appeared to be primarily of their own making. What this incident caused was a question of the company’s viability in their two year turnaround effort that Kertzman had put into place. An analyst who backs the questioning stated, “I keep thinking they're out of the woods, but then there's another setback,'' an analyst with Hambrecht & Quist. ''This coming out, at a time when they were already perceived as weak, is just another wound inflicted”(Fisher 8). This simply goes to show the wound that these employees left when they inexplicably went against company policy, knowing their actions were wrong and harmful towards the company. President Kertzman stated, “ five employees in the company's Japanese subsidiary -- who've either resigned or been fired -- pumped up sales by cutting deals that gave customers unusually generous terms such as the right to return software or delay payment. Those deals were [Type here]
FINANCIAL ACCOUNTING ETHICS PAPER 4 improperly booked as sales and had to be restated”(Beckett 12). The provisions made were a clear violation of the company’s accounting standards and was all covered up by those doing so, it also involved Sybase K.K president. Names of the individuals were never disclosed to the public. Kertzman goes on to say, “ There is zero chance they thought this was O.K… I think they thought the product would not come back, but they knew it was a violation of revenue recognition standards”(Fisher 10). The assumption of the cause of this scandal could have been the corporate culture. There is a possibility that the individuals involved in this scandal had some sort of leniency from their higher ups. If the president of that region had been involved in hiding these reports then there had to be leisure. These employees made deals with consumers that violated terms which produced members that violated accounting standards. Executives did not disclose the existence of the side letters until they were confronted which shows the authority felt on their end.
- Spring '14
- Creative accounting, Sybase