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Assignment example - Finance and accounting : Advanced financial reporting and regulation
Finance & Accounting
Pages 10 (2510 words)
Advanced Financial Reporting and Regulation Subject: Tutor: April 8, 2013 Advanced Financial Reporting and Regulation Introduction Companies are required to prepare true amount of expenditures and profits in the accounting reports. The research delves on management strategies to improve the financial picture of the companies…
Extract of sample
Management would often resort to extreme earnings’ management techniques in order to inflate sales and earnings so that meet the analysts’ earnings forecasts (Kumar, 2008). One way of inflating sales and earnings is through the use of window dressing marketing strategy. Department stores normally resort to window dressing marketing strategies. Window dressing is placing top selling products on the store shelves. Consequently, customers would enter the store to buy the products displayed on the store shelves. Upon entering the store, the customers can observe and buy other not so popular products strategically located on certain store shelf locations. In accounting parlance, window dressing is presenting a more favorable financial report than the actual report of the business transactions. The aim of window dressing is to increase the revenues of the company. Another aim of window dressing is to show higher assets and lower liabilities than what is the actual assets amount or liabilities amount. To increase net profits, the company must show that sales increased. Stuffing the channels include delivering to goods to customers even though there is no sales order (Bejou, 2006). With the window dressing of the financial statements, the company presents a better or more favorable picture of the company (Bastos, 2010). ...
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