accounting practices that seem to follow the letter of the applicable accounting standards but deviate from the spirit of those standards. It is the use of accounting methods to hide aspects of a company’s financial dealings in order to make the company appear more or less successful than it is in reality. In other words‚ Creative accounting is the transformation of financial accounting figures from what they actually are to what preparers desire by taking advantage of the existing rules and/or ignoring
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Enron and WorldCom Scandals Matthew Morrison ACC/260 8/18/12 Enron and WorldCom Scandals Question number one of the Enron case focuses on the corporations that got Enron into its difficulties these were the special purpose entities for joint partnerships including Chewco‚ LJM1‚ LMJ2 and the Raptors. Number three of the Enron case shows us that the board was divided into five divisions‚ all of which were full of well-educated financial employees who
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WorldCom Scandal A summary of WorldCom fraud would include having to describe the greed that would eventually destroy one of the largest communications companies in the United States and world. A humble motel owner‚ Bernard Ebbers took a small long distance company in 1983 and turned it into one of the most successful businesses in the country. It was not so much the business operations that caused the company to grow but the aggressive acquisitions that made the company grow. In its day‚ CEO Bernard
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combination with other assets‚ to contribute directly or indirectly to future net cash inflows‚ a particular entity can obtain the benefit and control others’ access to it and the transaction or other event giving rise to the entity’s right to or control of the benefit has already occurred. Future economic benefit is the essence of an asset (paragraphs 27–31). An asset has the capacity to serve the entity by being exchanged for something else of value to the entity‚ by being used to produce something
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operating mainly in the USA. Though Kenneth played a smaller role in management‚ following the takeover‚ he soon became chief executive officer (CEO) and moved the headquarters from Omaha to Houston. During 2001‚ it had become apparent that a number of special purpose entities were not consolidated in the balance sheet and the company admitted that there had been a number of financial reporting irregularities over the period 1997 to 2000. This made a lot of people suspicious about the company
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Introduction WorldCom‚ the telecommunications giant‚ once was the largest telecommunications company in the world‚ with more than $30 billion annual revenue‚ $104 billion in assets and more than 20 million customers. John Sidgmore (2002)‚ Ebbers’ successor after the scandal‚ said “WorldCom is a key component of our nation’s economy and communications infrastructure.” However‚ the giant collapsed in 2002. 1. The Main Issue: Earnings Management 1.1 Definition of Earnings Management A commonly acknowledged
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reported as current revenue. Stocks were paid with promissory notes instead of cash. They also engaged in off-the-books activities and excessive executive compensation. Enron’s board of directors allowed the executives‚ accountants and legal department to use Special Purpose Entities (SPEs)‚ a type of partnership‚ in an attempt to camouflage their debt and create a façade of financial stability (Brooks‚ 2007). 3. Enron’s directors understood how profits were made
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Of Management Thought From The Early Time To Modern Times. most important and integral part of planning (b) Describe in brief the development of management thought from the early time to modern times... Premium History Of Management Thought Revision Two is to begin with the work of Frederick W. Taylor and trace developments in management thought in Great Britain‚ Europe‚ Japan‚ and the U.S.A. up to about 1929... Premium Evolution Of Management Thoughts to the development of management thought
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ECOP1001 Economics as a Social Science Essay The essay should compare Two different schools of economic thoughts Question 4. What is profit? Where do profits come from? Economic theories simplify the relations among key economic concepts and enable us to understand different economic concepts. Throughout history‚ different economists in different time periods have formed diverse thoughts on how markets work by building and improving on the work of those who came before them. Therefore in order
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The WorldCom Accounting Scandal WorldCom was started in Mississippi as a long distance telephone service provider in 1983 (Lyke and Jickling‚ 2). Over the next decade and a half‚ the company expanded to offer a whole range of telecommunication services through a series of mergers and acquisitions (Lyke and Jickling‚ 2). At its height‚ WorldCom was the largest long distance phone company in the United States and was one of the leading companies in the telecommunication market in the world‚ providing
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