F&C INTERNATIONAL, INC.
Over two centuries, the Fries family of northern Kentucky and southern Ohio built a dynasty of sorts in the flavor industry. Alex Fries, a German immigrant with a background in chemistry, settled in Cincinnati during the early nineteenth century and a few years later established a flavor company. Throughout the nineteenth and twentieth centuries, Fries and his descendants owned, operated, or oversaw several flavor companies, the last of which was F&C International. In the early 1990s, F & C’s chief executive, Jon Fries, orchestrated a large-scale financial fraud that proved the undoing of the company and the family’s proud history …show more content…
Then, I ask the individual groups to defend those scores. Typically, at least some of the scores vary markedly across the groups--which triggers considerable debate and discussion. As a point of information, you might remind your students that the Sarbanes-Oxley Act of 2002 (specifically, Section 302 of that statute) now requires a public company’s “principal executive officer or officers and the principal financial officer or officers” to “sign off” on each quarterly and annual report filed with the SEC. In effect, these officers must provide a written warranty that the given reports, including the financial statement data included therein, do not contain any “untrue statement” involving a material fact.
Suggested Solutions to Case Questions
1. Chief executive officer: In most companies, the CEO ranks as the ultimate decision maker within the firm. This is where the “buck stops” in terms of long-range policy issues facing a company. Granted, in most companies, the CEO seeks and obtains input from fellow officers, the board of directors, and various other parties before making decisions on important matters facing a company. Independent auditors may occasionally question a client’s CEO regarding key accounting or financial reporting issues. Generally, though, auditors will direct their questions to lower-level company officials