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According to the Washington Post, face masks with the coin-sized valves on the front may not be as good at preventing the spread of the novel coronavirus as the seemingly lower-tech, non-valved masks.

Questions:

  1. Why are the lower-tech masks better at preventing the spread of COVID-19?
  2. Do medical masks have the valves?
  3. What does the CDC recommend for the public?
  4. Use the Internet to find the most interesting story about masks and economic impact, accounting, or finance.

Source:

Fritz, A. (2020) Why simple cloth masks without valves are better at fighting the spread of covid-19. The Washington Post, June 28 (Retrievable online at https://www.washingtonpost.com/health/why-simple-cloth-masks-without-valves-are-better-at-fighting-the-spread-of-covid-19/2020/06/26/c445fca6-b574-11ea-aca5-ebb63d27e1ff_story.html)

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According to the Washington Post, the shutdown of Broadway’s 41 theaters will continue at least until Jan. 3.

Questions:

  1. Why is Broadway so important to New York’s economic health?
  2. What will happen to ticketholders for shows up to and including January 3?
  3. What percent of tickets for commercial productions in 1,000- to 2,000-seat theaters must be sold for the theaters to be profitable?

Source:

Marks, P. (2020). Broadway will remain shuttered until at least January. The Washington Post, June 29 (Retrievable online at https://www.washingtonpost.com/coronavirus/broadway-will-remain-shuttered-until-at-least-january/2020/06/29/ce97dbaa-ba21-11ea-bdaf-a129f921026f_story.html)

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According to the Dayton Daily News, the parent company of Chuck E. Cheese has filed for Chapter 11 reorganization bankruptcy “in order to overcome the financial strain resulting from prolonged COVID-19 related venue closures” and to restore the kids-entertainment-and-pizza chain to a position of long-term success, according to a release from CEC Entertainment, Inc.

All across the country, similar newspaper articles are popping up with a hint of sadness for a provider of childhood memories, pizza, and whack-a-mole – all affected by coronavirus.

Questions:

  1. What is the name of the parent company?
  2. What was the major financial problem that it has encountered since COVID-19 hit in March this year?
  3. How many locations does it have and where are they located?
  4. How many locations does it plan to close?
  5. How old is the Chuck E. Cheese chain?

Source:

Bomey, N. (2020) Chuck E. Cheese, Peter Piper Pizza parent company files for Chapter 11 bankruptcy protection amid pandemic closings. USA Today, June 25 (Retrievable online at https://www.usatoday.com/story/money/2020/06/25/chuck-e-cheese-files-bankruptcy-peter-piper-pizza-chapter-11/3256152001/)

Fisher, M. (2020) Chuck E. Cheese files for bankruptcy, closes 3 Ohio locations. The Dayton Daily News, June 29 (Retrievable online at https://www.daytondailynews.com/news/local/chuck-cheese-files-for-bankruptcy-closes-ohio-locations/McDoI64zDkHgPZ7m0UAlNI/)

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In an 8-to-1 decision, written by Justice Sonia Sotomayor, the court said the money must be for the benefit of investors and cannot exceed the actual profits that came from the wrongdoing. 

Questions:

  1. Which justice voted against the majority saying that the law does not give authority to the SEC for the practice of disgorgement?
  2. How much does the SEC typically win each year in disgorgement orders from federal courts?
  3. How many cases are remaining for the Supreme Court this term?
  4. With respect to the court case, what was decided about the amount of the $27 million defrauded by Charles Liu and his wife Xin “Lisa” Wang?

Source:

Barnes, R. (2020). Supreme Court affirms SEC’s ability to recoup profits from fraud but places limits. The Washington Post, June 22 (Retrievable online at https://www.washingtonpost.com/politics/courts_law/supreme-court-affirms-secs-ability-to-recoup-profits-from-fraud-but-places-limits/2020/06/22/dfe8a9e6-b488-11ea-aca5-ebb63d27e1ff_story.html)

Posted by & filed under Accounting Information Systems, Accounting Principles, Advanced Accounting, All Articles, Auditing, Cost Accounting, Ethical Dilemma, Financial Accounting, Intermediate Accounting, Managerial Accounting, Uncategorized.

Corporate lawyer, Jay Clayton, named to the Securities and Exchange Commission (SEC) was near to landing his dream job when he became embroiled in a huge political fight where Geoffrey S. Berman, the current United States attorney for the Southern District of New York was fired.  

Questions:

  1. What was the controversy explained in the article?
  2. Why was Clayton considered to be the classic Republican pick by the Trump administration for Berman’s job?
  3. What types of actions has Clayton taken in the SEC?
  4. For you, what was the most interesting point in this article?

Source:

Goldstein, M. and B. Protess. (2020). Jay Clayton, Low-Profile Regulator, Is Catapulted Into a Political Fight. The New York Times, June 20 (Retrievable online at https://www.nytimes.com/2020/06/20/business/jay-clayton-sdny-sec.html).

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According to the New York Times, eviction cases are expected to soar in New York City as housing courts reopen and landlords seek to recoup income lost during the pandemic.

Questions:

  1. What is the estimate of how many eviction actions will be filed in New York City’s housing courts in the coming days?
  2. In addition to tentant woes, explain the situation faced by many landlords and what percent may default on their properties.
  3. Before the moratorium, how many evictions took place this year?
  4. About 2.3 million tenants in New York City received relief on their future rent. Explain how this works and who are not affected.

Source:
Haag, M. (2020). A Moratorium on Evictions Ends, Leaving Thousands of Tenants Fearful. The New York Times, June 22 (Retrievable online at https://www.nytimes.com/2020/06/22/nyregion/nyc-evictions-moratorium-coronavirus.html)

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According to Bloomberg News and Accounting Today, accounting firm Ernst & Young was sued over its work for Wirecard AG, just two days after Wirecard’s headquarters were raided as part of a market manipulation probe.

Questions:

  1. What is Wirecard AG?
  2. What does E&Y’s suit allege?
  3. Discuss what the issues are related to Wirecard’s purported fraud.

Source:

Mattusek, K. (2020) Ernst & Young sued over Wirecard as accounting woes add up. Accounting Today, June 8 (Retrievable online at https://www.accountingtoday.com/articles/ernst-young-sued-over-wirecard-as-accounting-woes-add-up?)

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According to the New York Times, entrants to the New York City’s housing lottery have waited years, through a tiresome and complex process. Now the system is getting an overhaul.

Questions:

  1. What type of eligibility does a lottery applicant have to prove prior to being qualified for an apartment in New York’s housing program?
  2. What was the ratio of applications to number of units in 2013?
  3. How will the new system streamline the system?
  4. How many affordable homes have been created or preserved in the low-cost program since 2014?

Source:

Haag, M. (2020). 25 Million Applications: The Scramble for N.Y.C. Affordable Housing. The New York Times, June 15 (Retrievable online at https://www.nytimes.com/2020/06/15/nyregion/nyc-affordable-housing-lottery.html)

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HCA Healthcare, one of the world’s wealthiest hospital chains, earning more than $7 billion in the past two years and worth $36 billion, paid its chief executive $26 million in 2019.

However, as the pandemic spread across America, HCA did not provide adequate protective gear to medical staff, froze wages for nurses, and has laid off or cut pay for tens of thousands of doctors, nurses and lower-paid workers.  All this has happened as HCA received about $1 billion in bailout funds from the federal government to stabilize hospitals during COVID-19. Still, HCA continued to pay top executives to with only modest pay cuts.

Questions:

  1. Has this been a norm for most hospitals? Discuss.
  2. How are furloughs and layoffs defended by the industry?
  3. What were the formulas to determine how much money hospitals received based on? What would have made more sense and why?
  4. Discuss an item in the article that troubled you the most. Did it trouble you based on ethics or on accounting efficacy?

Sources:

Silver-Greenberg, J., J. Drucker, and D. Enrich. (2020) . Hospitals Got Bailouts and Furloughed Thousands While Paying C.E.O.s Millions. The New York Times, June 8 (Retrievable online at https://www.nytimes.com/2020/06/08/business/hospitals-bailouts-ceo-pay.html)

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More easing of the rules

The Food and Drug Administration has temporarily loosened labeling and information rules for food manufacturers for the fifth time during the novel coronavirus pandemic.

Questions:

  1. Why were the rules eased and what do advocacy groups fear?
  2. What rules were eased?
  3. According to the article, what type of food disruption have led to this rule easing?
  4. What types of costs would be minimized by the formulation changes mentioned in the article?

Source:

Reiley, L. (2020) FDA rolls back food rules for 5th time during pandemic. The Washington Post, May 27 (Retrievable at https://www.washingtonpost.com/business/2020/05/27/fda-rolls-back-food-rules-5th-time-during-pandemic/)