Managing/Manipulating the Numbers (Research Paper Sample)
For a variety of reasons, business attempt to manage their reported assets, liabilities, revenues, expenses, or income. I need help to search the Wall Street Journal, Barron’s, Business Week or other financial/business periodicals for articles on the subject. Attached is one such article involving Dell Corp. Do not research academic journals, as the articles typically will be too long and complex for our purposes.
1) what the company did
2) why they did it
3) what reported financial numbers were affected
4) the dollar amount by which the reported numbers were affected
Managing/Manipulating the Numbers
Relying on aggressive accounting assumptions has been one of the approaches through which, companies make there financial information to appear less volatile. There are various earnings management techniques employed by companies to match earnings with losses, and this is meant to enhance the reported numbers. Even though, manipulating numbers might not necessarily be fraud it is unethical and potentially misleading to users of financial information. In the case of Tyco international, the management relied on practises that did not appear suspect at first, but they were in a position to manipulate the accounting practices.
What the company did
Tyco International manipulated there numbers at the turn of the 21st century in order to give a more positive outlook about the company. Even though, some of the accounting tricks used did not necessarily result to fraud, the need to restate some of the accounts showed that, the financial information was prepared in a way to manipulate users of the company’s financial records. Since the company has been involved in carious mergers and acquisitions over time, some of the expenses attributed to the restructuring were not properly reflected in the company’s records over time. This included the recognition and amortization of goodwill amount. Even though, the manipulation of numbers did not adversely affect the company’s operations since was no threat of bankruptcy, there was a significant fall in the share price
One of the accounting tricks was the use of reserves in cases where there were unrelated expenses, while also misrepresenting some expenses as long-term costs (Maremont & Cohe...
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