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Finance and Accounting Essay: Business Financial Crime
Finance & Accounting
Pages 10 (2510 words)
Title: Business Financial Crime Introduction: Financial crimes occur in businesses when any kind of falsification takes place in the accounting measures. This is generally carried out intentionally by the financial management team of a company for the purpose of convincing others with financial results that are false, thereby increasing the value of the company in the industry.
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 selfish objectives (Wild, 2006, pp.86-87). With regard to the increase in financial crimes in businesses, and several instances of earnings management being reported, this study focuses on the literature of earnings management and analyzes the cases reported to draw a conclusion with a view on the concerned topic. Earnings management, in exchange listed companies, is not fraud but a case of caveat emptor for investors. Earnings Management: An Overview Earnings management is the process of intentionally misrepresenting financial data in the accounting measurements such that the company can show greater profits and more value than it actually has obtained. ...
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