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Financial Reporting: Do Small Errors Need to be Reported?

Ben is a recent Santa Clara University graduate who has just started his first job in the finance department of a publicly traded Silicon Valley company. One of his main responsibilities is to create and distribute extensive Microsoft Excel reports that analyze costs and revenues for different divisions. Ben sends completed reports to his direct supervisor and the CFO. The CFO then uses the information to create the company's financial reports, in addition to the strategy and forecasting formulation.

While Ben considers himself to be detailed-oriented, the complicated nature of and the sheer volume of data sometimes overwhelm him, which is exacerbated by their strict deadlines. While Ben works hard to prepare the reports as accurately as possible, he often finds errors after he has submitted his final report. When the errors are critical, he revises the reports and resends them. However, some of the errors are minor, in Ben's estimation, and he doubts that the CFO will use or look at these figures. Ben is ambitious and wants to be promoted, but worries that if he frequently sends out revised reports he will appear unreliable and unqualified. At the same time, the potential consequences from inaccurate financial reports put the company, the CFO and CEO, and Ben himself at risk.

What actions should Ben take when he catches a mistake? Is he obligated to report every error, particularly since he works for a publicly traded company? Is there such a thing as a small error in this context?

Posted June 2013

Comments Comments

vishal said on Nov 6, 2014
pls tell me the answer or suggestion ..
Sidney Estes said on Dec 9, 2014
In my opinion Ben should send out a revised version of the report as soon as he sees a mistake. Although this may hinder his promotion it will assure his boss that he is diligent and even though he is not perfect every time he is willing to find his mistakes and correct them. Also if Ben makes a mistake on something that he judges to be insignificant but in reality is of very important then it may end up costing his company, the CFO and his job. Also if Ben feels rushed then maybe he should address this issue with the CFO, He needs to let him know that to file an accurate report. Although it may make him be viewed as incompetent by his peers and maybe his boss it will show that he would rather do a thorough job when he could get away with doing a less than adequate job.
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Tags: Finance, Just out of SCU