What could a Logitech staff accountant have done if he/she knew that the CFO and controller failed to write down the discontinued Revue parts inventory? Original blog posting (May 25, 2017)

Logitech Revue Revue produced and sold in 2010 – 2011 Revue was discontinued in 2011 due to low sales (high price, blocked content, software bugs)

Logitech Revue Logitech had millions invested in Revue component inventory that was worth little Logitech CFO and controller conspired to only write down a small portion of the component inventory, misrepresenting that the components would be used to manufacture other products Logitech was fined $7.5 million by the SEC for this inventory accounting fraud and two other issues

For all discussion questions: There is no indication that Logitech staff accountants knew of the improper inventory accounting during 2010 – 2011. However, assume that one Logitech staff accountant did indeed know of the issue and answer the following questions.

Question 1 What steps should the staff accountant have taken once aware of the inventory issue?

Question 2 Why might the staff accountant have remained silent even if aware of the inventory issue?

Question 3 What might have happened to the staff accountant if the SEC had discovered that the staff accountant knew of the inventory issue at the time but remained silent?

Question Recap What steps should the staff accountant have taken once aware of the inventory issue? Why might the staff accountant have remained silent even if aware of the inventory issue? What might have happened to the staff accountant if the SEC had discovered that the staff accountant knew of the inventory issue at the time but remained silent?

For additional news stories to use in the accounting classroom, see the Accounting in the Headlines blog at http://accountingintheheadlines.com/ Questions or comments? Contact Dr. Wendy Tietz at wtietz@kent.edu