In June 2020, the board of directors for Nadec Corporation authorizes the sale of SR 10,000,000 of company bonds. Waleed
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In June 2020, the board of directors for Nadec Corporation authorizes the sale of SR 10,000,000 of company bonds. Waleed
company bonds. Waleed Al Dossari, treasurer for Nadec, is concerned about the date when the bonds are issued. The company really needs the cash, but he is worried that if the bonds are issued before the company's year-end (December 31, 2020) the additional liability will have an adverse effect on a number of important ratios. In July, he explains to company president Fasial Al Ajlan that if they delay issuing the bonds until after December 31, the bonds will not affect the ratios until December 31, 2021. They will have to report the issuance as a subsequent event, which requires only footnote disclosure. Al Dossari expects that with expected improved financial performance in 2021, the ratios should be better. Instructions a. What are the ethical issues involved? b. Should Al Ajlan agree to the delay?
In June 2020, the board of directors for Nadec Corporation authorizes the sale of SR 10,000,000 of