The number of ways financial reporting can be manipulated are as endless as human imagination. In this program we introduce some of the most common forms of “earnings management” through aggressive application of accounting principles. These are practices which, at least arguably, fall within reporting guidelines but allow management and accountants to affect reported results by accounting treatment. A knowledge of basic accounting principles or our program Introduction to Financial Statement Concepts is needed to fully take advantage of this material.
<b>Agenda</b>
Revenue recognition ¨ Earning revenue vs. receipt of cash ¨ Stuffing the channels ¨ Product sale ¨ Long-term contracts
Asset write-down/restructuring charges ¨ Historical cost/lower-of-cost-or-market ¨ Late write-down ¨ Early write-down
Bad debt allowance ¨ Change in methods ¨ Credit standards
Capitalizing vs. expensing ¨ Effect on net income
Change in accounting method/assumption/estimate ¨ Depreciation ¨ Inventory
About the VBA
