ACIS 3115 Chapter Notes - Chapter ecase: Location Manager, Enron Scandal, Earnings Management
23 Aug 2016
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Didn"t do it, kept job until she could find another. Shes a cpa/controller, cfo boss asked her to overstate inventory & ar by understating allowance for uncollectibles---basically earnings management. Cfo had asked 3 other times during audit prep work. Tried to convince her that inventory was salable and ar was collectible, rationalizing because dilquents will eventually pay, inventory salabe because no longer manufactured believable! Just out of college, didn"t know how to stand up to boss. Started to believe him, but then went home and realized how his rationalizing was wrong. Went back the next day to explain, he threatened that 400 would lose their job otherwise her friends tho because mid size company! Bipolar pam, bryans unconscious wife in hospital, cherlys old and wouldn"t find another job. If fraud was discovered, she would get in trouble, not cfo, but sox made it so it would be their responsibility since they certify the books.
