ethical dilemma faced by Jim Dietz and the company's chief executive officer

Cranor Corporation is a manufacturer of medical equipment including X-ray machines.
Company has incurred loss of USD 8.4 million in year 2011 on account of expenses incurred
towards recall of equipment’s amounting to USD 10 million. The recall was due to flaw in
designing equipment’s which company recalled and rectified.
The suggestion made by the company controller Jim Dietz to treat the expenses pertaining to
recall as an extraordinary item should not be accepted as it is against fair accounting practices.
As per US GAAP Accounting or any accounting standard corporate responsibility, corporate
accountability, corporate ethics, sustainability, or even compliance is a key aspect which should
be considered while framing the accounts and accounts related disclosure.
As per US GAAP codification topic 225-20, Criteria for extraordinary items are that it
should be
 Unusual in nature and
 Infrequency of occurrence
Presentation of Extraordinary items:
 Extraordinary items should...