Imagine you are one of the staff accountants for John Smith Company, which produces small accessories for cellphones. The president has informed your department that if the company’s profits grow by 5 percent this year, the accounting department will receive a bonus of $2,500 each. No bonuses will be awarded if profit growth is less than 5 percent. Near the end of this fiscal year, you have the following conversation with the president: 

President:	We are awfully close to hitting our numbers and getting to the 5 percent target. With two weeks remaining, projections show we will come in at 4 percent for the year. What can we do on the accounting side to increase current year profits?
Accountant:	Well, I’m not sure there is anything we can do. Our accounting is squeaky clean, as confirmed by our independent auditors. Perhaps our sales will improve next year.
President:	There has to be something we can do I could sure use the bonus money, and our investors would appreciate an increase in their investment! I know we have a large customer order to be filled the first week of next year. Why not include that sale in this year’s numbers?
Accountant:	I’m not comfortable recording sales in the wrong fiscal year.
President:	We’re only talking about moving sales by a few days! I would like you to consider this carefully. If you can’t do this, I may have to find an accountant who can! Let’s talk about our options later this week.

Form groups of three and discuss the ethics of this situation. What impact would recording sales in the wrong fiscal year have on the income statement and balance sheet? What would you do in this situation?