One in Six CFOs Tells of Pressure to ‘Cook’ Books

About one in six chief financial officers reports being pressured by chief executives to misrepresent corporate financial results, and 5% say they have violated accounting rules in the last five years, a new survey found.

The study, published in Thursday’s edition of CFO magazine, comes amid continuing worries about the integrity of companies’ financial results and follows a number of high-profile arrests, including those Thursday of two former WorldCom Inc. executives on fraud and conspiracy charges.

Julia Homer, the magazine’s editor in chief, said the figures were unsurprising.

“It’s very common knowledge,” she said. “Anecdotally, we’ve heard quite a bit over the last few years about the pressure on companies to make quarterly earnings estimates” published by Wall Street analysts.

Of 141 CFOs of public companies who responded to the survey, 17% said they had been pressured by CEOs and 5% acknowledged violating generally accepted accounting principles once in the last five years. Two-thirds of respondents worked at companies with more than $1 billion in annual revenue.

Still, 93% of CFOs denied engaging in aggressive accounting practices.

“One clear message is that not everybody responds to the pressure,” Homer said.

The magazine said it sent out 2,000 surveys. No margin of error for the poll was given.

W. Michael Hoffman, executive director of the Center for Business Ethics at Bentley College in Waltham, Mass., said the findings were consistent with those of other studies, which have shown even more CFOs reporting such pressure from other employees--not just CEOs.

“I’m not sure I am surprised, especially when you think about all the pressures CEOs are under to meet the expectations of Wall Street,” he said. “I can imagine the CFO feeling the pressure from the CEO who’s saying, ‘We’re not going to get a ‘buy’ rating any longer on Wall Street from these analysts.’ ”