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Under Armour Settles with the SEC

Mitchell Stein, Vaughan S. Radcliffe, David Booth

Product #:W27293
Supplier:Ivey
Discipline:Accounting, Finance
Setting:United States, 2021
Details:Case (PDF) • 15 pages • 2022-02-23

Subjects:

Corporate governanceBusiness managementFinance and investingAccounting

Industries:

Goods, trade, and consumer services

Geography:

North AmericaUnited States
Your Price:$9.71

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In May 2021, a recent graduate from the master of business administration program at Ivey Business School noticed a news article about one of his investments, the leading athletic apparel company Under Armour, Inc. The article stated that Under Armour, Inc. was fined US$9 Million by the US Security and Exchange Commission. The charges were a result of concerns over the company’s revenue reporting practices, but the company's share price dropped only very slightly following the announcement. The investor was considering his options regarding his investment. However, he was still curious and eager to learn more about the circumstances behind the US Security and Exchange Commission’s charge and potential consequences for the company. The investor decided to examine Under Armour, Inc.’s revenue reporting practices, financial reporting practices, and corporate governance issues.

Learning Objectives

This case can be used in early financial accounting courses at the undergraduate or graduate level. For most classes, this case should be introduced after students have attained a basic understanding of generally accepted accounting principles, are comfortable with basic accounting standards and concepts (specifically, revenue recognition), and have a general sense of management’s responsibility over financial statements. After completion of this case, students will be able to
  • understand the importance of adequate financial reporting disclosures in revenue reporting and the fair presentation of a company’s current and future financial performance;
  • gain exposure to reporting requirements around the recognition of revenue for public companies;
  • understand the impact that the failure to disclose material financial information in the reporting of revenue may have on the users of a company’s financial statements; and
  • learn about concepts surrounding governance, control within organizations, and management’s privilege of having access to material non-public information.
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Case Study: Under Armour Settles with the SEC (English version) | Ivey Publishing