Reference no: EM132291396

CASE STUDY - DIAMOND FOODS' PAYMNTS TO NUT GROWERS

Learning Objectives - After completing and discussing this case, you should be able to

• Recognize a food company recording costs in the wrong period.
• Understand how company culture and senior management can influence behavior and lead to the wrong decisions.
• Recognize how financial statements and reporting are impacted by fraudulent activities.
• Identify how fraud can be prevented and appreciate how other stakeholders respond to fraud allegations.

Questions -

1. Review Research Diamonds Foods website. Find and read articles written about the problems they had with payments to the nut growers in 2010 and 2011. Did Diamond record payments to the nuts growers in the wrong period? Did the company commit fraudulent acts?

2. What financial accounting rules are applicable in this instance?

a. In what physical periods should fall 2010 and fall 2011 payments have been recorded in the DF income statements?

b. Is this a different period than when the cash was paid to the growers?

c. What was the impact on the company's financial statements in those years?

3. What other factors were occurring at the company that may have contributed to this situation? Consider hints in the case and the articles you reviewed in question (1) above as you answer this question.

4. Who found the fraud? How could it have been prevented? What actions did the company take as a result of these events?

5. Did Diamonds Foods acquire the Pringles line from Proctor & Gamble?

Attachment:- Case Study.rar