|
|
This is only a preview of the paper
Click here to register and get the full text.
Existing members click here to login
|
|
|
As with issues such as selective disclosure, the widespread custom of Earnings Management has evolved over the years. ...
In these crazy economic times where companies are cutting costs and struggling to meet earnings expectations, businesses are under great pressure to appear profitable in order to attract investors and resources. ... Arthur Levitt’s memo on “Earnings Management Abuses” reported, in the last quarter of 1998, the importance of reporting reliable and accurate financial statements. ...
Corporate America’s constant pressure to meet or beat Wall Street earnings projections, has led many CFOs to practice their creative math skills on the companies’ financial books. ... When business earnings “go south” these restructuring charges are conservatively under stated and over stated as income. ... During the purchase or stock acquisitions of one company by another, corporations have classified these cost as “in-process”, hiding them under Research & Development and writing it up as one shot deal to protect future earnings. ...
“Revenue Recognition”
Although there are several financial professionals who argue on the inconsistencies regarding guidelines and acceptable practices of legitimate revenue recognition, companies
boosting their earnings by recognizing potential future earnings are clearly a bad practice. ... Earnings management abuses often stem from misuse or misunderstanding of the proper application of the materiality concept. ... Enforcement teams will act aggressively on those companies which abuse financial reporting processes.
Approximate Word count = 1060
Approximate Pages = 4.2
(250 words per page double spaced)
|
|
|
|
|
|