ACC 660 Module 4 Discussion Example

Reviewed by Portia Lambrick, MBA

This ACC 660 Module 4 Discussion sample examines adjusted EBITDA and what a controller should do when asked to add back costs that are not really one-time. The sample serves SNHU ACC 660 (ACC-660) students in the MS Accounting program, where Module Four's prompt raises ethics and earnings quality. Before a quarterly covenant test, the private equity sponsor of a composite veterinary hospital group asks the controller to add back about $5 million, which would keep debt to EBITDA under the loan's limit. The post sorts the proposed add-backs into those that qualify and those that do not, applies the IMA's ethical standards and resolution steps, and draws on research about adjusted earnings. It asks classmates where they would hold the line.

CourseACC 660 Controllership
ModuleModule 4
Paper typegraduate discussion post on adjusted earnings and ethics
LengthAbout 360 words, 3 pages
FormatAPA 7 student paper
SchoolSouthern New Hampshire University
ProgramMS Accounting
UpdatedOctober 2026

Free sample paper for ACC 660 Module 4

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Module Four Discussion

Five Million Dollars of Adjustments

Ten days before the quarterly covenant certificate is due, the sponsor's operating partner sent the controller a list of add-backs for the group's trailing twelve-month EBITDA. Without them, total debt of $236 million is 5.6 times adjusted EBITDA of about $42 million, above the loan's 5.5 limit. With them, the ratio falls to about 5.0 times.

What this page is doingThe request is described.
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The items differ. Acquisition fees of $0.9 million for legal and diligence work on two hospital purchases are genuinely tied to transactions and are expressly permitted by the credit agreement. Veterinarian recruiting costs of $1.4 million are not: in a national shortage the group recruits every year, so these are an ongoing cost of doing business. IT costs of $0.6 million have been called one-time for three straight years, which answers the question. Synergies of $2.1 million, savings expected but not yet achieved at acquired hospitals, are allowed by many loan agreements as pro forma adjustments, but this agreement caps them at 10 percent of EBITDA and requires the actions to be taken within twelve months; only $1.3 million qualifies.

Accepting the qualifying items, $2.2 million in all, brings debt to EBITDA to about 5.3 times, inside the limit, without the recurring costs. That answer is both honest and within the contract.

The IMA's Statement of Ethical Professional Practice requires integrity and credibility, including communicating information fairly and disclosing anything that would affect a user's understanding (Institute of Management Accountants, 2017). If the operating partner insisted on the recurring items, the controller should follow the IMA's resolution steps: discuss with the CFO, then, if unresolved, raise it with the board's audit committee, and consult counsel, with resignation as a last resort. Black et al. (2018) review evidence that non-GAAP adjustments are often informative but sometimes exclude recurring expenses, and Dichev et al. (2013) report that CFOs themselves believe a meaningful share of companies manage earnings, which is why lenders rely on controllers to hold this line.

What this page is doingThe items are analyzed and the standards applied.
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For classmates: if the credit agreement had allowed recruiting costs as an add-back, would you still object to signing, or is the contract the only standard that matters?

What this page is doingClassmates are asked where they hold the line.
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References

Black, D. E., Christensen, T. E., Ciesielski, J. T., & Whipple, B. C. (2018). Non-GAAP reporting: Evidence from academia and current practice. Journal of Business Finance & Accounting, 45(3-4), 259-294. https://doi.org/10.1111/jbfa.12298

Dichev, I. D., Graham, J. R., Harvey, C. R., & Rajgopal, S. (2013). Earnings quality: Evidence from the field. Journal of Accounting and Economics, 56(2-3), 1-33. https://doi.org/10.1016/j.jacceco.2013.05.004

Institute of Management Accountants. (2017). IMA statement of ethical professional practice. Author.

What the ACC 660 Module 4 instructions ask for

The Module Four discussion in ACC 660 usually raises an ethical issue for a controller, often pressure to adjust earnings, accelerate revenue or present non-GAAP measures favorably. Expect a post of moderate length that applies the IMA's code of ethics and at least one study, with replies to classmates afterward. Strong posts analyze the specific items, explain which are defensible and which are not, apply the IMA standards of competence, confidentiality, integrity and credibility and describe the steps the controller would take to resolve the conflict. A position stated plainly, with the reasoning behind it, earns more than a survey of both sides, and a number showing what is at stake makes the dilemma real.

How this ACC 660 Module 4 discussion example is built

The post analyzes four proposed add-backs: $0.9 million of acquisition fees, $1.4 million of veterinarian recruiting costs, $0.6 million of IT costs labeled one-time for a third straight year and $2.1 million of synergies expected but not yet achieved at acquired hospitals. It accepts the deal fees, rejects recruiting and IT as recurring, and accepts synergies only as the credit agreement defines and caps them. With no add-backs, debt to EBITDA is 5.6 times against a 5.5 limit; with only the qualifying items it is 5.3 times. It applies the IMA standards, outlines escalation to the CFO and board, cites Black and colleagues on non-GAAP practice and Dichev and colleagues on earnings quality and asks classmates whether the contract alone should decide what a controller signs.

Where the ACC 660 Module 4 rubric puts the points

Scoring for the ethics discussion typically weighs analysis of the specific items, accurate application of the IMA standards, the resolution steps, research support and replies. The best posts distinguish legitimate adjustments from disguised recurring costs, recognize that covenant definitions are contractual and consider the consequences for lenders and the company. Posts that treat all adjustments as unethical, or that describe the IMA standards without applying them, score lower. Replies that challenge a classmate's classification of an item or propose a different resolution step count for more than simple agreement. Citing the credit agreement's own definition, where the prompt provides it, adds rigor, as does naming the IMA standard each step serves.

ACC 660 Module 4 help: the mistakes that cost points

Students sometimes argue that any add-back is manipulation, when credit agreements and investors routinely accept adjustments for genuinely nonrecurring items; the question is whether each item fits. Others name the IMA standards without describing what the controller would actually do next. If your prompt concerns revenue timing instead, the same approach applies: analyze the specific transaction, apply the standards and set out the resolution steps. State the debt ratio or earnings figure with and without the disputed items; the number makes the stakes concrete for classmates. Then say exactly whom you would speak to, and in what order, if your view were overruled.

Get ACC 660 Module 4 written to your instructions

Send the ACC 660 Module 4 prompt. The post will analyze the adjustments or dilemma in your prompt, apply the IMA standards and resolution steps and support its position with research, closing with a question for replies. Turnaround is about two days, and your first one is free. The paper above is an original model document written by our desk, not a submitted student paper and not an official Southern New Hampshire University document.

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ACC 660 Module 4 questions, answered

Where can I find a free ACC 660 Module 4 Discussion sample?

This page includes the full ACC 660 Module 4 post on EBITDA add-backs and the controller's ethical duties.

What are the IMA's ethical standards?

Competence, confidentiality, integrity and credibility, set out in the IMA Statement of Ethical Professional Practice along with steps for resolving ethical issues.

What is an EBITDA add-back?

An adjustment that removes an expense from EBITDA on the basis that it is nonrecurring or not representative of ongoing operations, often defined in credit agreements.

How should a controller resolve an ethical conflict?

Follow company policy, discuss the matter with a supervisor and, if unresolved, higher levels such as the audit committee or board, consult the IMA ethics resources or an attorney, and consider resigning if it cannot be resolved.

Do adjusted earnings mislead investors?

Research finds many adjustments are informative, but some exclude recurring costs, so the quality of adjustments varies and needs scrutiny.