Don Russell:Experiences of a Controller/CFO

Case Summary:

The case considers the economics and ethics of "managing" earnings and the roles of finance professionals (and general managers and auditors) in the financial reporting process. The case is compelling because Don Russell, a chief financial officer, has to make a decision that has significant company and personal consequences. The case raises some complex accounting, organizational, and ethical issues.

Case Questions:

1. Does Don have the power to force ETI top management to make a correcting accounting entry? If not, what should he do? If so, should he force the entry to be made, and how large should it be?
2. Does Don Russell have an obligation greater than that of other employees to try to ensure that his corporation acts ethically?