The company has a share-based compensation plan for top-level executives consisting of stock options. The value of the options exercised during the year was not expensed or disclosed in the financial statements. The company has several operating and capital leases in place, and the CFO is considering leasing a substantial portion of the assets for future use. The current leases in place are arranged using special purpose entities( SPEs) and operating leases. The company seeks to acquire a global partner, which will require IFRS reporting. The company received correspondence from the Securities and Exchange Commission( SEC) requesting additional supplemental 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