Got a tricky question? Receive an answer from students like you! Try us!

Cosmetic Accounting/ Creative Accounting - Essay Example

Only on StudentShare
Premium quality
Masters
Author : edna60
Essay
Finance & Accounting
Pages 7 (1757 words)

Summary

The opening of the report consists of the overview of the concepts of cosmetic accounting. The report continued with such issues: cosmetic accounting as blessing or curse; causes of cosmetic accounting; techniques of cosmetic accounting; effects of cosmetic accountings; solutions of cosmetic accounting…

Extract of sample
Cosmetic Accounting/ Creative Accounting

From this research it is clear that cosmetic or creative accounting is a process where accountant use their knowledge about accounting rules to change or manipulate the reported figures of the company’s business accounts. Cosmetic accounting can be describe in different ways like it is referred as the terms of income smoothing , earning management , earning smoothing or somewhere as financial engineering. The term cosmetic accounting is used when ,accepted accounting techniques those are not allow to use as to report financial results of a company, and with the help of creative accounting those prohibited techniques are used to manipulate accurate picture of the company. The methods of creative accounting are noteworthy because they remain in use as generally accepted accounting principal. As an author every company is fiddling its profit, every sets of published accounts are based on books which have been gently cooked or completely roasted. This deception is all in perfectly good taste. It is creative accounting. Creative accounting also based on some unethical elements like as accounting details of a restaurant can be anything (true and fair). The creativity in such details is like showing a half glass of water as half-full instead of presenting it as half-empty. Both statements are correct but both can paint different pictures and create different images in user’s mind. Sometimes, creativity accounting can be described as accounting manipulation. ...
Download paper
Not exactly what you need?

Related Essays

Finance and Accounting Essay: Business Financial Crime
Earnings management is one of the most popular measures of financial business crimes, occurring in companies on a habitual basis. It can be defined as a process of intentional interference of the management in the establishment of the earnings of a business, misrepresenting the data to show better results than they actually are. Several reasons lead to management of earnings which include manager’s compensation, raising stock price, or pushing for government funding. There are different strategies available that managers can use for the purpose of earnings management and hence satisfy their…
12 pages (3012 words)
Advanced Financial Reporting - Prevalence of Creative Accounting
This report will be evaluating the reasons that give rise to creative accounting by organizations; the grounds for the nativity of this practice will also be discussed. The evaluation of the efforts made by existing standards and accounting practices in controlling and reducing aggressive accounting will be catered in the report. The levels of success achieved by regulatory bodies will also be discoursed. Increasing the complexity of accounting treatments in such a creative and aggressive way, actually results in deviation from the actual spirit of the suggested treatment. Transactions are…
11 pages (2761 words)
Accounting Fraud, Earnings Manipulation, and Creative Accounting
financial reporting process, and also put into doubt the role played by management, regulators, auditors, and analysts in preventing accounting fraud. Businesses employ deceptive or fraudulent accounting practices such as creative accounting to match the expectations. Accounting fraud refers to an intentional and inappropriate falsification of a company’s accounting records such as the stating of sales revenue and/or expenses. Accounting fraud is geared towards making a company’s financial performance (operating profit) appear better than it is. The motivation for misrepresentation of…
6 pages (1506 words)
Finance and Accounting
The companies’ compliance with IFRS standards can effectively help predict the future financial outcomes and reduce irresponsible cosmetic accounting practices. The company’s compliance with all International Financial Reporting Standards will translate to better prediction of forecasting future business outcomes. For example, the compliance with standards requires that the company present the historical sales amount s for the past two years. If the sales for 2010 is $ 250,000 and sales for 2011 is $295,000. Any keen financial statement analyst or reader can easily forecast next year’s…
6 pages (1506 words)
accounting
Uniformity will allow for comparisons in the industry as a whole and that will ensure that the best performing entities are noted. The other advantage of uniform accounting is the fact that it will be easier for the relevant authorities to check the books of accounts when it is required. That will reduce any instances of tax evasion or any other crimes that are associated with manipulation of financial records. The inventory accounting method that I would recommend is the use of the average method. The average method is fairer in the setting of the price on the side of the seller and the…
3 pages (753 words)
accounting
During my academic career I have demonstrated that I am a great student. It is important to me to learn as much as I can from the course material, my professor, and my fellow classmates. Doing external research is extremely important to keep up with the latest data and information. The hardest part of being an accountant is complying with deadlines. e) No I do not have a job arranged upon completion of this program. I am still looking for a job. I am seeking a job in accounting or an entry level managerial position. Despite my passion for numbers and accounting I would prefer to work as a…
4 pages (1004 words)
Accounting Controversies
Deception was the name of the game for Enron. They concealed their controversial and suspicious dealings and transaction with their growing debt so that they appear debt-free and admirable to stockholders and the public. …
5 pages (1255 words)