information regarding the financial statements submitted with the IPO . Write an eight to ten ( 8-10 ) page paper in which you : Evaluate any damaging financial and ethical repercussions of failure to include the inventory write-downs in the financial statements . Prepare a recommendation to the CFO , evaluating the negative impact of a civil fraud penalty on the corporation as a result of the IRS audit . In the recommendation , include essential internal control procedures to prevent fraudulent financial reporting from occurring , as well as the major obligation of the CEO and CFO to ensure compliance . Examine the negative results on stakeholders and the financial statements of an IRS audit which generates additional tax and penalties or subsequent audits . Assume that the subsequent audit and / or additional tax and penalties result from the taxpayer ’ s use of an inventory reserve account , applying a 10 percent reduction to inventory over three ( 3 ) years . Discuss the applicable federal tax laws , regulations , rulings , and court cases related to the inventory write-downs , and explain the specific relevance of each to the write-down . Research the current generally accepted accounting principles ( GAAP ) regarding stock option accounting . Evaluate the current treatment of the company ’ s share-based compensation plan based on GAAP reporting . Contrast the financial benefits and risks of the share-based compensation stock option plan with the financial benefits and risks of a share-based stock-appreciation rights plan ( SARS ). Recommend to the CFO which plan the company should use , and provide the correct accounting treatment for each . Research the reporting requirements for lease reporting under GAAP and International Financial Reporting Standards ( IFRS ). Based on your research , create a proposal for future lease transactions to the CFO . Within the proposal , discuss the use of off-the-balance sheet financing arrangements , capital leases , and operating leases , and indicate the related business and financial risks of each . Create an argument for or against a single set of international accounting standards related to lease accounting based on the global