Business Ethics and Corporate Governance, Second Edition

MINI CASE 4: DERELICTION OF DUTY BY A CFO

The chief financial officer (CFO) of a company is responsible for budgeting and control. Budget is the score-card by which the company is measured. The CFO ensures that an appropriate system is in place to measure the company’s performance. The CFO is also involved in the treasury function, where he or she allocates resources within the context of the budget. He or she identifies the financial resources such as banks, institutional investors, etc., and then begins the allocation of these resources.

In contrast to the responsibilities of a CFO, Prabhat Goyal, former CFO of Network Associates was charged with orchestrating a scheme to inflate the company’s sales and earnings. He was indicted on the grounds ...