EC3: Russell Company is a pesticide manufacturer. Its sales declined greatly this year due to the passage of logislation outlawing the sale of several of Russelis chemical pesticides. In the coming year, Russell will have environmentally safe and compettive chemicals to replace theife discontinued products. Sales in the next year are expected to greatly exceed those from any prior years. The decline in sales and profits appears to be a one-year aberration. But even sa the company president fears a large dip in the current year's profits. He believes that such a dip could cause a significant drop in the market price of Russell's stock and make the company a takeover target. To avoid this possibility, the company president calls in Zoo Baas, controllor, to discuss this period's year-end adjusting entries, He urges her to accue every poisibio revenue and to dofer as many expensos as possiblo. He says to Zoo, We neod the revenues this year, and next yoar can easily absorb expenses deforred from this year. We can't let our stock price be hammered downl" Zoe didn't get around to recording the ad/usting entrias unti January 17 , but she datiod the entrios Docomber 31 as if they were recorded then. Zoe also made every effort to comply with the president's request. - Who are the stakeholders in this situation? - What are the ethical considerations of (a) the president's request and (b) Zoe dating the adjusting entries December 31 ? - Can Zoe accrue revenues, defer expenses, and still be ethical? - Can Zoe's accrued revenues and deferred expenses be illegal? - Who do you think can discover Zoe's accrued revenues and deferred expenses