Cfo Resignation Memo

In: Business and Management

Submitted By sjanetham
Words 433
Pages 2
Memorandum
To: Accounting Manager
From: Marisol Covena
Date: September 10, 2012
Subject: LGA Entertainment CFO Resignation

As part as the suddenly resignation of our CFO, Alberto Lizarraga, our company has the obligation to deal frankly, comprehensively, and immediately with any material information. The Securities and Exchange Commission (SEC) has a list of disclosures requirements, which attempted to protect the public from abuses in the issuance and sale of securities. SEC have requested our company for certain documentation due to an apparently concern of the revenue recognition.
The SEC has challenged corporations and public relations firms on the accuracy of information they disseminate for clients. The SEC in 2000 adopted regulation FD, or “Fair Disclosure”. Basically, regulation FD requires companies to widely disseminate any material announcement. It is imperative to disclosure the information rather than withholding it.
According with Seitel (2011) the most effective crisis communicators are those who provide prompt, frank, and full information to the media in the eye of the storm. If we communicate our situation to our stakeholders, we are going to stop rumors and they will be calmed. Our goal is to terminate the crisis quickly, limit the damage and restore credibility. It may take quick remedial action however it will be well worth.
Our company needs to proceed with ethics, in others words, “doing the right thing” calming external stakeholders regarding SEC’s big concerns; revenue recognition. We must follow SEC’s regulations and comply. That does not mean we reveal “everything” but it does mean that we should never lie in order to keep our reputation and enhance public trust of our organization.
The quickest way to end the distress and begin to build back credibility is to fix the action and communicate through the media. Our company can’t…...

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