As chief financial officer to respond when it detects a serious accounting fraud? Richard Okumoto, recently appointed CFO of Electro Scientific Industries, Inc, found that about midnight a few months earlier, a group of managers led by a man who later became CEO, canceled accrued liabilities related to the estimated cost of employee retirement benefits. This "midnight log entry" enabled the company to provide benefits, not a loss, for the quarter. Okumoto said that the appeal was wrong, and revenues must be recalculated. As he approached the general manager, general counsel, and the audit committee of its concern, however, he was told to "just ignore it." Okumoto had to decide how best to act on his belief that the company made the unethical and illegal act, minimizing the risk to themselves and their future career prospects. "Hide
by Anne T. Lawrence Source: North American Case Research Association (NACRA) 10 pages. Publication Date: March 1, 2012. Prod. #: NA0180-PDF-ENG
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