How should a CFO react when he uncover a severe bookkeeping fraud? Richard Okumoto, the recently-named CFO of Electro Scientific Industries, Inc., learned that around midnight several months before, a group of managers, directed by a guy who later became CEO, had reversed an accrued liability connected with the hoped-for price of employee retirement benefits. This "midnight journal entry" had allowed the business to report a gain, rather than a loss, for the quarter.
Okumoto considered that the reversal was improper and the business's earnings ought to be restated. Okumoto needed to determine how best to act on his conviction that the company had committed a prohibited and unethical act, while minimizing the risk to his future career prospects and himself.
The Midnight Journal Entry case study solution
PUBLICATION DATE: March 01, 2012 PRODUCT #: NA0180-HCB-ENG
This is just an excerpt. This case is about FINANCE & ACCOUNTING
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