Solved by verified expert:please read a case and write me 6-7 pages include refrence page. I attached Tesla Inc. Case Rating Rubric to take alook at it to know how will be graded. note; avoid plagarisim and be on time
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Between mid-September and mid-October of 2016, the Securities and Exchange Commission
(SEC) put Tesla Inc. under fire after the latter added back certain costs to revenue using non-GAAP
earnings. While the use of non-GAAP earnings is allowed to some extent, Tesla violated the US
GAAP. In four separate comment letters sent from the SEC to Tesla, the regulatory body inquired
about “….a statement disclosing the reason why you believe that the presentation of a non-GAAP
financial measure provides useful information to investors…not how your management uses the
1. Why the SEC had to issue four comment letters to Tesla?
2. What does non-GAAP earnings mean? Why it is violation of US GAAP in some situations?
3. What are the differences between GAAP and non-GAAP earnings numbers according to
Tesla’s financial statements during the above period?
4. Briefly summarize the response from Tesla to the SEC and whether it makes sense to you.
Please support your answer.
5. What are the efforts made by the SEC subsequent to the infamous Tesla’s scenario? Do
you think these efforts helped in curbing non-GAAP earnings by other firms and why?
Tesla Inc. Case Rating Rubric
The total score will be measured using the below rubric.
Can identify an ethical issue in a problem or case
Can identify the stakeholders involved in the ethical issue
Can identify the alternatives for a solution
Can identify a resolution for the ethical conflict
Can describe how to promote development of an ethical organizational climate
Can describe the impact of unethical behavior in an organization
Know the code of conduct for Accounting/Auditing/Finance
Spelling & Grammar
Logic & Development of Ideas
Format & Organization
Note: Your case solutions must include answers to ALL questions in the case.
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