As an accountant I have ethical obligations to the company and to
external users such as investors to do my job honestly. In this
particular case, if I do what the CEO is telling me to do, I'm being
unethical and breaking the law. I'm also jeopardizing my integrity as
an accountant and my whole career. I would politely explain to him
why I will not be following his requests because they are illegal and
unethical. First, you can't capitalize until after expenditures for assets
has begun. Him saying to capitalize a year prior to beginning work on
the building doesn't make sense from a rudimentary accounting
standpoint. Secondly, telling me to add in overhead costs to
manipulate profits and 1/12th of my salary to entice me to break the
law is extremely illegal and misleading to shareholders and potential
shareholders. My moral compass wouldn't allow me to do anything
he asked me and I would probably quit the job and report him with
any evidence I had to the proper authorities.
References:
Wahlen, Jones & Pagach. (2017). Intermediate Accounting: Reporting
and analysis (2nd ed.). Boston, MA: Cengage Learning.
