Rich and Wealth

SURVEY RESULTS

The survey results are presented and discussed in the order in which the three sections
appeared in the survey questionnaire: (more…)

Survey Respondents

The survey respondents included chief financial officers, analysts, lenders, CPAs, and accounting academics. About three-quarters of the accounting academics are also CPAs with varying amounts of practice experience. We also surveyed some advanced master’s of business administration (MBA) students. The graduate students mainly specialized in accounting or finance and most had several years of business experience prior to returning to graduate studies. (more…)

Survey Instrument (2)

The second section of the survey calls for respondents to indicate their degree of agreement or disagreement with a series of 10 statements dealing with earnings management. The statements deal with the goals of earnings management, whether it can help or hurt investors, and whether or not earnings management has become more common over the past decade. Respondents were asked to indicate the degree of their agreement or disagreement with the statements using the following choices: (more…)

Survey Instrument

The survey instrument is comprised of three sections. The first section includes descriptions
of 20 techniques that could be used to manage earnings. Many of these techniques have actually been the targets of enforcement actions by the Securities and Exchange Commission. Survey respondents were asked to classify each of the techniques in terms of their relationship to generally accepted accounting principles (GAAP). The four classifications are as follows: (more…)

Financial Professionals Speak Out (3)

The campaign launched by the Securities and Exchange Commission, under the leadership of former SEC chairman Arthur Levitt, is the focal point of the letter. The thrust of Mr. Levitt’s views is that the numbers game has gone too far and that some companies are abusing the legitimate flexibility in the application of GAAP to produce financial results that distort performance. Given the investor-protection role of the SEC, (more…)

Financial Professionals Speak Out (2)

There is little systematic information available on the views of financial professionals about the financial numbers game, how the game is played and might be detected, and whether and under what circumstances it might be considered to be either good or bad. Also, we know little about their views regarding the compliance with GAAP of the various techniques employed in the financial numbers game. The goal of this chapter is to contribute to this void by reporting the results of a survey of financial professionals. (more…)

Financial Professionals Speak Out

It [earnings management] gives the appearance of greater stability than is the reality. As a consequence, when the day of reckoning comes, which it inevitably does, the fall is much farther than it needs to be.1 (more…)

Cheap Eyeglasses on Zenni Optical

Sometimes without we realize, our vision is start to loss its sharpness. There are so many factors caused that. Mostly that because wrong pattern or reading, too much working in front of monitors, or perhaps the aging factors. (more…)

SUMMARY (2)

• Efforts of the SEC notwithstanding, creative accounting practices are not expected to disappear. They may change form and become more carefully hidden, but the financial pressures that help to bring them about remain. (more…)

SUMMARY

The SEC has not been idle as numerous examples of creative accounting practices, sometimes entailing alleged fraudulent activity, have surfaced in recent years. Concerned about the integrity of the financial reporting system in the United States, the SEC has mounted a direct attack on what it views to be the causes of questionable reporting. This chapter provides details of the problems the SEC sees with the current reporting environment, identifies what the commission is doing about these problems, and discusses the tools available to the commission to ensure compliance with its reporting regulations. Key points made in the chapter include the following: (more…)