Assignment Locate and research a case on Earnings Management found in an Accounting and Auditing...

Question

Assignment

Locate and research a case on Earnings Management found in an Accounting and Auditing Enforcement Release (AAER) of the Securities and Exchange Commission (SEC). Select a publicly traded company that uses U.S. GAAP for which an AAER was published on the SEC website in the past five years.
After selecting your case, review any credible articles published relating to this company as well as information available on the company’s Investor Relations website to evaluate the following items:
• Identify specific facts of the case that caused the SEC to become involved in the investigation
• Discuss how the SEC handled the complaints.
• How did the company react to the investigation?
• Were any sanctions imposed by the SEC? If so what, were they.
• What steps did the company take to rectify the situation?
• What’s the current status of the investigation today?
Requirements:
• 4 pages, double-spaced with 1-inch margins and 12-point Times New Roman font
o
The title page and reference page are not counted towards the page requirement.

• APA format
•
At least 3 credible citations

•
Acceptable sources are scholarly articles from professional peer-reviewed accounting and business journals published within the last five years.

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Ankita · Accepted Answer

AAER on Honeywell International Inc.		2
AAER ON
HONEYWELL INTERNATIONAL INC
Introduction
We here will discuss the case of Honeywell International Inc which is traded in NASDAQ for which the AAER was published on the SEC website.
Summary
The facts states that there has been violation of the anti -bribery, books and records and internal control provision of the “Foreign Corrupt Practices Act” in relation to the bribery schemes in Brazil and Algeria. It has been noticed that a bribe of $4million has been offered to a Brazilian official by Honeywell’s US wholly owned subsidiary with the assistance of an intermediary to win a contract with the Brazilian state-owned oil company- “Petrobras”. In Algeria too, in a similar case was found wherein employees of Honeywell Process solution with their intermediary paid money to an Algerian Government official to secure a contract amendment with Algerian state-owned oil company. Honeywell did not maintain proper books of accounts in connection with the scheme and also its internal control could not detect and prevent the misconduct. 
Scenario
In the year 2008 and 2009 Petrobras called for bidding process which had three phases technical ranking, design competition and commercial valuation from different companies to design and construct two grassroot refineries to process heavy oil in Brazil (Liu et al., 2022). In 2009 when the companies submitted the technical proposal for the bidding Honeywell along with other two company received the highest ranking to proceed for the next phases.
As during this time Honeywell was interested in developing a stronger foothold in Brazilian oil industry it began searching for high level contacts at Petrobas to succeed in the bidding process, so Honeywell retained the Brazil agent to gain access to high officials at Petrobras (Lehenchuk et al., 2020). It submitted the bid based on the information provided by the Petrobras’s downstream director. First it submitted a bid of $425 million which was first rejected later on Honeywell revised its bid to $348 million on guidance provided by the high officials at Petrobras and was awarded the premium project. Honeywell paid Brazil Agent a total of $10.4 million as commission from US Account.

Assignment Locate and research a case on Earnings Management found in an Accounting and Auditing Enforcement Release (AAER) of the Securities and Exchange Commission (SEC). Select a publicly traded...

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