Expert: Ed McFarland - 10/16/2005

Question
Hi
 I work for a corporation and my  boss told me to  do the following  in order to bring the profit down this year  and save a little for next year ( our profit is too high this year) . Otherwise it will look like that he did not handle the business properly. I am just wondering Is this ethically righ and what should i do in this case
My boss told me that she has heard that we could declare that some of our construction jobs are not as far along as we originally thought, so we would only have to include a lower percentage of expected profits on each job in our profit this year. And also take the 124000 in R&D Costs out of the job cost in inventory and expense them right away  

Answer
This is the type of thing that sent the guys from Worldcom to jail.

If you have a plan for accounting for completion and taking costs and revenue accordingly, that would be wrong. However it is more on an ad hoc level when you take it wheever, not quite the problem.

If you have an internal audit department ask them. If you don't keep good notes on why and how you did things.


Good luck.