Corporate Collapse Case Study Part 2 - Essay Example

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Corporate Collapse Case Study Part 2

In USA this procedure is a part of fraud accounting but in the UK it is used to provide flexibility in the existing accounting and regulatory system of the company. The sole purpose of accounting is to provide a true and fair view to the users of the financial information (Larson, 2008). Creative accounting does not necessarily mean the violation of GAAP rules or breaching of any terms and condition of the company. The accountants generally use this concept to insert flexibility in the accounting system and deliver a true and fair view to the users of the financial report and information (Jones, 2011). Mark to Market accounting on the other hand is used for updating the value of an asset or a liability to reflect the real market value of the asset/ liability (Wolnizer, 2003). This was mainly used for transaction related to future exchange and recently it is been used by banks and other financial institutions. This method got official recognition in the year 2009 by FASB (Financial Accounting Standard Board). This method was used to prevent inappropriate use of financial value. ...Show more

Summary

Corporate Collapse of Lehman Brothers Table of Contents Table of Contents 2 Fraud, Creative, Mark to Market accounting and poor auditing 3 Examples of failure in the accounting procedure 4 Role of Accounting in Corporate collapses 5 The collapse of Lehman Brothers 6 References 9 Fraud, Creative, Mark to Market accounting and poor auditing The procedure of using fictitious accounting transactions which are generally prevented by the GAAP (Generally accepted accounting principles) is known as fraud accounting…
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