Jade asked in Business & FinanceCorporations · 9 months ago

If you are a staff accountant and your superior has asked you to incorrectly record advertising cost, Would that hurt you and the company?

9 Answers

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  • 9 months ago

    Yes. You will be fired and accused of fraud.

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  • 9 months ago

    If you did it you would be party to fraud. You need to speak to someone above the person that told you to do that.

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  • 9 months ago

    They wanted you to incorrectly record "advertising costs"?

    Not some obscure costs that doesn't have a specific home like the mini-snickers that sit on the receptionists counter? But advertising costs that is going to have a very specific account????

    Do your own homework?

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  • Jay
    Lv 6
    9 months ago

    The answer is Yes. If the company spent $1,000 on advertising and your boss told you to move $500 of that advertising expense to another category it could have big ramifications on the P&L statement at the end of the year.

    So the first question is: When you say - Your Boss - do you mean the person who is above you in the accounting department...Like the CFO or the company CPA? If this is the case, they may simply be asking you to reclassify something that was recorded as an advertising expense back to its correct category...like if a shop bought paper for fliers and recorded it as an advertising expense instead of office supplies.

    That would be a correcting journal entry.

    But if a 'non- financial' boss comes and asks you to reclassify something... the assistant director of marketing comes in and tells you to just take half of the advertising expense and move it to depreciation so the 'bottom line figures look better this month'...well that is bad and wrong and can get you fired...and basically black list you within the accounting community. You would not be able to get another accounting job.

    So if you have a management person leaning on you to change figures to make it look like there was more profit that period....you either check with the person who is above you... in the finance department...like the CFO or the CPA who prepares and files the company taxes...and say ;"PERSON told me to move the Advertising expense to the OTHER CATEGORY. Will that cause a problem at the end of the year?"

    That will effectively take the decision out of your hands.

    If you are the only person who works on the books and you are in charge of the tax returns..then you make a note on the journal entry that you were instructed to move something from advertising to another category by...and then put the full name of the person in the journal entry.

    And as the other person said, try to get them to email you the instruction. That way you have a clear cut trail of what happened.

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  • DEBS
    Lv 7
    9 months ago

    (I'm assuming by superior you mean someone in the management chain above you and not just someone with a higher title but not in your management chain.)

    Is this fraud? That can hurt both in the long run.

    Is it lack of knowledge/incompetence on your superior's part? That can hurt the company but likely not you if you fully document (email trail at minimum) the other person instructing you to do so.

    Or it may be that you don't have the full picture of what's happening. This is not uncommon at companies especially when there are executive level secrets your level isn't supposed to know.

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  • 9 months ago

    yes it will, a wrong entry will can be huge headache to clear

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  • Anonymous
    9 months ago

    You're really asking if cooking the books could hurt you?

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  • Anonymous
    9 months ago

    Yes. It will show up sooner or later in an audit. Heads will roll. Maybe yours.

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  • Jeremy
    Lv 5
    9 months ago

    It would hurt me because my job would be on the line as I would refuse to do what I was being asked to do.

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