Accounting Fraud, Earnings Manipulation, and Creative Accounting - Research Paper Example

Only on StudentShare

Extract of sample
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 accounting records hinges on the profit motive and sourcing a favorable financing and dodging debt obligations. Companies commit accounting fraud through activities such as failing to record prepaid expenses or other incidental assets, failing to show certain classifications of current assets and/ or liabilities, or collapsing both short-term and long-term debt into a single amount (Jones 3). Overstatement of sales revenue is one of the techniques employed in committing accounting fraud. Overstatement of sales arises from activities such as channel stuffing and delaying recording of products returned by clients. This is directed at avoiding recognition of those offsets against sales revenue within the current year. Other means by which businesses commit accounting fraud include under-recording expenses such as depreciation expense. ...Show more

Summary

Accounting fraud refers to an intentional and inappropriate falsification of a company’s accounting records.Accounting fraud is geared towards making a company’s financial performance (operating profit) appear better than it is…
Author : dlynch
Save Your Time for More Important Things
Let us write or edit the research paper on your topic
"Accounting Fraud, Earnings Manipulation, and Creative Accounting"
with a personal 20% discount.
Grab the best paper

Related Essays

An overview of the concept of cosmetic accounting
The intention of this study is cosmetic accounting that can be represented by the income smoothing technique. This consists in deliberate using of accounting policies to report the series of income as low from one period to another for the purpose of showing low wealth to shareholders. This way, the management can reduce the net income’s fluctuations from one period to another.
7 pages (1750 words) Essay
Finance and Accounting Essay: Business Financial Crime
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.
12 pages (3000 words) Essay
Advanced Financial Reporting - Prevalence of Creative Accounting
Creative accounting is an innovative yet unethical practice that converts the sense of an accounting treatment while being within the scope of treatment prescribed by accounting standards. It can be said that taking advantages of the loopholes present in accounting standards is the other way of explaining creative accounting.
11 pages (2750 words) Essay
Management: The continuum from legitimacy to fraud
..………………………………5 Research Questions………………………..…………………………………….6 Hypotheses………………..………………………………………………….….6 Definitions of Key Terms…………………………..……………………………7 Theoretical Framework…………………..…………………………………………….
35 pages (8750 words) Research Paper
Positive Accounting Theory
Accounting Theory Introduction Positive Accounting Theory Political Cost Hypothesis Small Businesses Role of Banks in Development of Small Businesses Federal Governments and Small Businesses Conclusion Accounting Theory \Introduction The theory of Positive Accounting seeks to make relevant accounting transactions based on the predictions of real world situations and occurrences.
5 pages (1250 words) Research Paper
Financial Advance accounting
It is very much necessary that these financial reports that become available to the stakeholders of a company help them considerably in their decision making process. IFRS was first introduced by International Accounting Standards Board (IASB). IASB was set up as an independent body in United Kingdom.
8 pages (2000 words) Essay
EADs-BAe merger case analysis (Corporate Finance)
According to BAE systems and EADS the merger was founded on reasonable industrial hypothesis and presented a chance to make a combination from two famous and strong firms (DePamphilis, 2011; p. 7). The proposed merger was projected to create a combined business that would have formed a strong force for growth and competitiveness in the defense sector and the commercial aerospace, delivering sound benefits to the stakeholders.
7 pages (1750 words) Assignment
Earnings Management: The Continuum from Legitimacy to Fraud
Earnings Management: The Continuum from Legitimacy to Fraud Question. Earnings management entails an extensive range of illegitimate and legitimate actions undertaken by companies and business organizations’ managements, affecting the entire legal entities’ overall earnings.
38 pages (9500 words) Research Paper
Financial accounting
Revenue recognition Revenue is “the gross inflow of economic benefits during the period arising in the course of the ordinary activities of an entity when those inflows result in increases in equity, other than increases relating to contributions from equity participants.” An income can be described as a gross inflow of financial benefits, less cost of sales or /and other expenditures such as operating costs and tax liabilities.
5 pages (1250 words) Assignment
The main motivation for corporate [social and environmental] reporting ... is to enhance corporate image and credibility with stakeholders (Adams, 2002: 244-245). Do you agree? Use a variety of accounting theories to respond to Adams (2002) state
The primary motivation of the corporate reporting is to enhance the image of the corporate, as well as its credibility with the stakeholders. Stakeholders include customers, employees, the society as a whole, the suppliers as well
6 pages (1500 words) Essay
Find out how much would it cost
to get a custom paper written by a pro under your requirements!
Win a special DISCOUNT!
Put in your e-mail and click the button with your lucky finger
Your email
YOUR PRIZE:
Apply my DISCOUNT