Earning management essay

Paul Weller Abstract This thesis comprises of three essays. Vijh and Redouane Elkamhi.

Earning management essay

Earnings Management Earnings Management Essay Socially Responsible Investing or Socially Responsible Investment or the SRI is based on the viewpoint of investments that are to be supported by monetary, societal and ecological criteria.

The SRI investors invest in businesses that exhibit values. They people who Socially Earning management essay Investment try to keep away their investments from the organizations that are not environmentally friendly.

The terms of finance given to any organization mostly for the social benefit of the society is called philanthropy and is considered by some as giving back to society. This can either be in form of grants or loans with a primary intention of creating social value and not for any kind of a personal gain.

Earning Management - New York Essays

This can be either commercial or an individual giving or it can be both e. This comes under the caption of corporate matching. However, in the case of corporate philanthropy, people or organizations can directly contribute for the social causes and is referred as cause related marketing.

Nowadays, lots of financial frauds and failures are occurring, therefore, it is the duty of the accountants to emphasis on issues related to earnings management and earnings quality.

The earnings of a business are managed in many ways. Different businesses have different ways of how to manage their earnings. They can either be moral or immoral and unethical as well.

When the management does not try to control its earnings, they can see a positive effect on their earnings. The earnings data is more reliable because management is not controlling the earnings by changing accounting methods, recognizing one-time items, or deferring expenses or accelerating revenues to bring about desired short-term earnings results.

However, if the earnings management is not present, high quality earnings are not assured. All the earnings of the business cannot be stated in its financial statements; therefore, this theory is linked to the idea of earnings quality. This term, earnings management is known in order to control the earnings that are reported and this is done by using some defined accounting methods.

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Nowadays, there is a high demand of the assurance of the worth of the earnings that a business earns and this is the measure of the ability of the earnings that have been reported and also highlights the true earnings of the business.

It also forecasts the future earnings of the company that is expected by the managers. There was a complete change in the perception of the people when they found out that they had overlooked the decision making process at WorldCom and Enron to be ethical.

But infact, this was not the case. WorldCom and Enron were practicing unethical things. The stakeholders became concerned and demanded for a new financial report along with evidence supporting those statements. It is really hard to restore the confidence of the stakeholders once things have been shattered and same was the case with them.

Soon after the death of Anderson, the fall of Enron was visible. This shook America and the stakeholders of Enron seemed to be very much concerned when it was revealed that the business has been practicing unethical practices.

Everyone prefers to deal with businesses that are indulged in ethical practices and work for the safety of the environment and the society. All the stakeholders be it their customers, investors or the suppliers have the same opinion about it and it is the duty of the business managers to take of the activities that are being carried.

This also helps the business to achieve goodwill in the world. Legitimacy theory was also introduced in this era. After the real face of Enron and WorldCom was seen by the public, not just their legitimacy was challenged but the auditors of the company were questioned as well.

Although the public was more furious on Anderson as it was connected to the two but even the auditors had to give their justifications.Real-Activity Earnings Management using operating decisions: this type of earnings management is when managers make decisions that affect the real operations in the firm.

Earning management essay

This type is more dangerous both to the firm and to the managers. Screening and classifying earnings management literature did not only generate a structured overview of the work performed in this area, it also provided insights in some important voids, such as a focus on non-listed and small companies, ‘real’ earnings management and non-financial motives.

Earnings Management Essay Words | 5 Pages. evidences of managers manipulating the earnings for various reasons. “Earnings management is the choice by a manager of accounting policies, or real actions, affecting earnings so as to achieve some specific reported earnings objective” (Scott, .

Free Essays on Earnings Management for students. Use our papers to help you with yours 1 - The Earnings management is one of the most popular assignments among students' documents. If you are stuck with writing or missing ideas, scroll down and find inspiration in the best samples.

Earnings management is quite a rare and popular topic for writing an essay, but it certainly is in our database. real earnings management affects subsequent operating performance (as measured by both earnings and cash flows), and (ii) whether market participants (investors and analysts) expect the subsequent decline in performance.

Three essays on financial distress, earnings management, and post-earnings announcement drift