(Question and Answer): Just a Paragraph for the discussion

Just a Paragraph for the discussion

Imagine you are the controller of a major new tech start-up. Upper management is putting pressure on you to exceed Wall Street’s earnings expectations for the next quarter. You have decided that you have to “cook the books” in order to exceed expectations. Create a scheme to increase earnings for the quarter. Support your scheme with examples

Don't use plagiarized sources. Get Your Custom Essay on
(Question and Answer): Just a Paragraph for the discussion
Get an essay WRITTEN FOR YOU, Plagiarism free, and by an EXPERT!
Order Essay

Expert Answer

 

To increase net earnings, either revenues for the next quarter are to be overstated, or costs to be understated, or a combination of both needs to be resorted to.

Earnings management, an euphemism for cooking the books or financial manipulation, refers to managing any item in the financial statements in order to give the picture that the manage wants to portray. It can take various forms, and the spectrum may range from recording fictitious sales ( criminal ) to deferring some categories of expenditure, like advertising ( lawful).

To appear successful in the next quarter, you may want to increase income, increase the book value of assets and/or to decrease the book value of liabilities. Some methods that may be resorted to by management ( reproachable) to show higher earnings numbers are :

a. Lower the estimates for uncollectible debts, and keep bad debt expense to the minimum.

b. Do not recognise unearned revenues. Record all amounts received in the next quarter as revenues earned.

c. Recognize revenues for goods sent to distributors and consignment agents.

d. Do not record any accrued liabilities.

e. Leave contingent liabilities alone. They can be taken taken care of once the quarter has come and gone.

f. Defer depreciation charge on assets purchased during the next quarter.

g. Defer advertising expenses to the succeding quarter / quarters.

h. Reduce estimated warranty liability and warranty expense.

i. Restructure an operating lease as a capital lease, so that the operating costs are reduced.

j. If there in inflation, it could be prudent to switch from WAC to FIFO method of valuing inventories.

If all these

k. Stick with the straight line method of depreciation, and do not opt for the accelerated methods. Depreciation expense under the straight line method is lower than the accelerated methods during the earlier years of operation.

l. Raise the estimated useful lives of assets, so that quarterly depreciation charge is reduced.

Top Grade Homework
Order NOW For a 10% Discount!
Pages (550 words)
Approximate price: -

Why Work with Us

Top Quality and Well-Researched Papers

We always make sure that writers follow all your instructions precisely. You can choose your academic level: high school, college/university or professional, and we will assign a writer who has a respective degree.

Professional and Experienced Academic Writers

We have a team of professional writers with experience in academic and business writing. Many are native speakers and able to perform any task for which you need help.

Free Unlimited Revisions

If you think we missed something, send your order for a free revision. You have 10 days to submit the order for review after you have received the final document. You can do this yourself after logging into your personal account or by contacting our support.

Prompt Delivery and 100% Money-Back-Guarantee

All papers are always delivered on time. In case we need more time to master your paper, we may contact you regarding the deadline extension. In case you cannot provide us with more time, a 100% refund is guaranteed.

Original & Confidential

We use several writing tools checks to ensure that all documents you receive are free from plagiarism. Our editors carefully review all quotations in the text. We also promise maximum confidentiality in all of our services.

24/7 Customer Support

Our support agents are available 24 hours a day 7 days a week and committed to providing you with the best customer experience. Get in touch whenever you need any assistance.

Try it now!

Calculate the price of your order

Total price:
$0.00

How it works?

Follow these simple steps to get your paper done

Place your order

Fill in the order form and provide all details of your assignment.

Proceed with the payment

Choose the payment system that suits you most.

Receive the final file

Once your paper is ready, we will email it to you.

Our Services

No need to work on your paper at night. Sleep tight, we will cover your back. We offer all kinds of writing services.

Essays

Essay Writing Service

No matter what kind of academic paper you need and how urgent you need it, you are welcome to choose your academic level and the type of your paper at an affordable price. We take care of all your paper needs and give a 24/7 customer care support system.

Admissions

Admission Essays & Business Writing Help

An admission essay is an essay or other written statement by a candidate, often a potential student enrolling in a college, university, or graduate school. You can be rest assurred that through our service we will write the best admission essay for you.

Reviews

Editing Support

Our academic writers and editors make the necessary changes to your paper so that it is polished. We also format your document by correctly quoting the sources and creating reference lists in the formats APA, Harvard, MLA, Chicago / Turabian.

Reviews

Revision Support

If you think your paper could be improved, you can request a review. In this case, your paper will be checked by the writer or assigned to an editor. You can use this option as many times as you see fit. This is free because we want you to be completely satisfied with the service offered.

× Contact Live Agents