“Tempest in a K-Cup” focuses on events and financial reporting at Keurig Green Mountain in 2011–2012, a period that included a large seasoned equity offering, significant stock price volatility, an SEC investigation into the company's revenue recognition policies, and a very negative assessment of the company's valuation by a high-profile hedge fund manager. These events provide a rich setting in which to analyze the company and its financial reporting. Often, cases dealing with aggressive financial reporting focus on companies for which alleged wrongdoing was proven. Keurig Green Mountain is different. Despite numerous red flags in 2011–2012, the company has not yet been successfully prosecuted, sued, or even made the subject of an SEC enforcement action. This case has been written to take advantage of the ambiguity that remains as to whether the company engaged in earnings manipulation in 2011, in advance of its seasoned offering in May of that year....
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1 February 2017
Research Article|
February 01 2017
Tempest in a K-Cup: Red Flags on Green Mountain
Dennis H. Caplan;
Dennis H. Caplan
University at Albany, SUNY
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Saurav K. Dutta;
Saurav K. Dutta
University at Albany, SUNY
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David J. Marcinko
David J. Marcinko
Skidmore College
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Please do not make the Teaching Notes available to students or post them on websites.
Supplemental material can be accessed by clicking the link in Appendix A.
Editor's note: Accepted by Lori Holder-Webb.
2017
Issues in Accounting Education Teaching Notes (2017) 32 (1): 57–72.
Citation
Dennis H. Caplan, Saurav K. Dutta, David J. Marcinko; Tempest in a K-Cup: Red Flags on Green Mountain. Issues in Accounting Education Teaching Notes 1 February 2017; 32 (1): 57–72. https://doi.org/10.5555/iace-51344TN
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