Current Issue Assignment - Article Summary and Analysis Essay

Current Issue Assignment - Article Summary and Analysis - Essay Example ility for the company’s financial misstatements,† according to a news article published in Business Week on 30 October 2006, â€Å"Taro Pharma CFO Resigns after Report,† and submitted through The Associated Press (Hawthorne, NY). Taro has hired a law firm to probe the details of the case gathered by its own audit committee. Furthermore, the company has reported that â€Å"a member of the company’s senior financial management caused Taro to make misleading statements† to the SEC and the company’s auditor, Ernst & Young. The CFO of Taro and the unidentified financial management officer â€Å"vigorously disagreed† with the report before they both resigned. At present, the company has an interim chief administrative and restructuring officer, whose main job is to help Taro reduce its costs and restructure debt. The company is looking to obtain bank waivers as it cannot be compliant with some of its creditors because of the late filing of the annual report. For a company to ensure that it is legally safe and financially sound in the short as well as the long run, it is crucial to have financial statements that are both accurate and foolproof (Spiro 1996). Any financial management officer may blunder with numbers, either deliberately or not so. Inaccurate financial statements may wreck the budgeting process, cause significant damage to a company’s reputation, and make it rather difficult for it to obtain loans in future. True financial statements are the lifeblood of an organization. A company is connected with the public at large through its products and services, and also its shareholders, suppliers, and the families of its employees, besides its lenders (Spiro). A financial misstatement – depending on the discrepancy between a correct financial statement and a financial misstatement – may hurt all the members of society it interacts with, no matter who is responsible for the error. Finally, it is vital for all financial managers to team up with