Russell Company is a pesticide manufacturer. Its sales declined greatly this year due to the passage of legislation outlawing the sale of several of Russell’s chemical pesticides. In the coming year, Russell will have environmentally safe and competitive chemicals to replace these discontinued products. Sales in the next year are expected to greatly exceed any prior year’s. The decline in sales and profits appears to be a one-year irregularity. But even so, the company president fears a large dip in the current year’s profits.
To avoid this possibility, the company president calls in Zoe Baas, accountant, to discuss this period’s year-end adjusting entries. He urges her to delay recording as many expenses as possible. He says to Zoe, “We need our financial statements to look good this year!” Zoe didn’t get around to recording the adjusting entries until January 17, but she dated the entries December 31 as if they were recorded then. Zoe also made every effort to comply with the president’s request.

Instructions
a. Who are the stakeholders in this situation?
b. What are the ethical considerations of (1) the president’s request and (2) Zoe dating the adjusting entries December 31?
c. Can Zoe delay recording expenses and still be ethical?