The CEO asked me to book revenue incorrectly - help!

You are in a tough position. The CEO has set you up to be the fall guy if these actions are discovered. If you have the ability to go to the BOD, that is one option; otherwise you may need to decide when and how you want to leave the company. We can all discuss theory in a perfect world, but in this economy it is a much harder decision. Resigning could mean a long search for new employment; staying could mean a career-threatening debacle if the CEO pins this on you.

I wish you well.

Someone's losing a job here - might as well fight for it if you care about it. I'm the last one to go to the board when it's not needed. They are too busy or they don't really care about some CFO, but they will DEFINITELY care about this issue, and unless you have simply "misunderstood" your CEO, the CEO will be fired. You may still end up out of work. Hey, life's like that, and boards are funny like that (sometimes they just want to sweep the slate clean). However, as you correctly state, you know this is wrong, you know it will come back to bite the company (and you in the future, BTW), and if you play along with the shenanigans now, you are in a trap from which you will not be able to escape. And when (not if) it is discovered in the future, good luck finding work as a CFO in or around your zip code. Word can travel fast through investors.

And it sounds like you have your head on straight. Someone like you will not be able to sleep once you acquiesce to something like this. The slope is very slippery and you know it. I know this is a tough position and I certainly appreciate your final point about paying the CFOs bills (well put).

Good luck with this. It's ugly.

Tough situation and the CEO probably knows he and the economy have you between a rock and a hard place. You need to make the CEO give you explicit instructions as to his wishes so there is no 'misunderstanding' and then go to a member of the BOD.

Just to emphasize some of the inputs above:

1. You have to make absolutely certain that you and the CEO do not have a misunderstanding and that you are correct on the accounting issue (i.e., the CEO is asking you to do something unsupportable).
2. Assuming you are actually in the tough spot you describe, you go to the CEO first, not to the Board, to see if you can get the CEO to do the right thing. I would make it clear that you have to keep the books clean, and will go to the board if you have to to reach that result. There's a small chance the CEO will come to his/her senses (okay, very small).
3. If you lose this one, the easy answer is you have to take action to protect both the company and yourself. You cannot act unethically, period. It will crush you eventually.
4. You could make an argument you should just exit, but I favor going to the board so you can make sure you are heard and that the record reflects you tried to do the right thing.

Good luck.

Rex

To tag onto Rex's comments, I have done the following when I've been in this situation

1) Talked to my auditor/accountant and other in industry to confirm my position and ensure I was not missing anything.

2) While GAAP is important, I found that using the revenue policy approved by our auditors was pretty effective - since it was specific to our business - so it become difficult to justify a change.

3) I also found that often that the request is accompanied with no disclosure. However, I note that if we changed our revenue recognition policies that we would have to disclose it for two reasons: change in accounting policy (BOD item) and as a requirement for our incentive plans.

4) If the revenue is recorded too early, there was the issue of commissions for sales, impact on cash from potential payment of incentive plan (e.g. budget based goals) without the cash to support it.