Acc 545
MEMO
To: Manager of Newman Title Inc.
From:
Date: 12 September 2011
Re: SEC investigation and Resignation of CFO
The purpose of this memo is to provide Newman Title Inc. manager, about the investigation from U.S. Securities and Exchange Commission (SEC) regarding Newman Title’s accounting practice of revenue recognition, and the impact of CFO’s resignation for the company its share market.
Legally we are required to comply with the request of the SEC and give the SEC the invoices and copies of shipping documents as required by them. After examining the documents, the SEC will be satisfied that we were correct in including these sales in the revenues for the related accounting period. Such inquiries by SEC take place when their attention is drawn to unusually large transactions during the last quarter of the physical year. The CFO Mr. Brown Davis has resigned. The legal requirement is that we need to issue a public notice announcing this vacancy. This notice will give the job requirements as given by the law. This notice has already been prepared and will be released in leading national newspapers next week. Newman Title Inc should be ready to interview candidates for the position of the CFO. Public communication is very important in this situation. We need to spread information to gain public awareness for our financial position, the resignation of the CFO and the SEC enquiries. In particular, we need to target our shareholders, lenders, employees and customers. The impression created by the occurrence of these three events is that these are somehow connected with each other. If we do not communicate to our employees and shareholder properly on time the rumour could start circulating within or outside the company which could lead to losing the confidence from our shareholders and the customers. The purpose of making a press release is to calm our stakeholders. We do not want our stocks to get affected, we do
To: Manager of Newman Title Inc.
From:
Date: 12 September 2011
Re: SEC investigation and Resignation of CFO
The purpose of this memo is to provide Newman Title Inc. manager, about the investigation from U.S. Securities and Exchange Commission (SEC) regarding Newman Title’s accounting practice of revenue recognition, and the impact of CFO’s resignation for the company its share market.
Legally we are required to comply with the request of the SEC and give the SEC the invoices and copies of shipping documents as required by them. After examining the documents, the SEC will be satisfied that we were correct in including these sales in the revenues for the related accounting period. Such inquiries by SEC take place when their attention is drawn to unusually large transactions during the last quarter of the physical year. The CFO Mr. Brown Davis has resigned. The legal requirement is that we need to issue a public notice announcing this vacancy. This notice will give the job requirements as given by the law. This notice has already been prepared and will be released in leading national newspapers next week. Newman Title Inc should be ready to interview candidates for the position of the CFO. Public communication is very important in this situation. We need to spread information to gain public awareness for our financial position, the resignation of the CFO and the SEC enquiries. In particular, we need to target our shareholders, lenders, employees and customers. The impression created by the occurrence of these three events is that these are somehow connected with each other. If we do not communicate to our employees and shareholder properly on time the rumour could start circulating within or outside the company which could lead to losing the confidence from our shareholders and the customers. The purpose of making a press release is to calm our stakeholders. We do not want our stocks to get affected, we do