Accounting Abuses

In: Business and Management

Submitted By zhiying
Words 1537
Pages 7
Earnings management, or some say ‘creative accounting’ are accounting practices that do not follow the rules of standard accounting practices. It is defined as ‘the use of judgment in financial reporting and in structuring transactions to alter financial reports to either mislead some stakeholders about the underlying economic performance of the company, or to influence contractual outcomes that depend on reported accounting judgments.’ (www.nysscpa.org/cpajournal/2001/0700/features/f073801.htm) There are compelling economic reasons for managers to engage in earnings management, because the value of the firm and the wealth of its managers are inextricably linked to reported earnings.

Manipulating share price
Firm managers perceive a connection between reported earnings and the company’s market value. In an effort to alter investor’s perceptions, companies usually engage in earnings management to manipulate earnings in an effort to report positive earnings and earnings growth. Such actions will also portray a strong financial position of the company at the end of the financial year. As a result, investors will be attracted to buy the company’s shares. Shareholder and public’s confidence with the company will also increase. Thus, this leads to an increase in stock price which is the ultimate goal of firm managers.

Compensation
Contracts between a company and its managements’ remuneration depend on accounting numbers to determine exchanges between them. The top management’s bonuses are usually tied to the company’s share price or firm’s earnings; therefore they will have a desire to manage the earnings of the company so as to increase their remunerations. By altering the accounting numbers, managers can influence their current and future compensation. They can also enter a variety of transactions and alter operating decisions to maintain a smooth earnings…...

Similar Documents

Coupon Accounting Abuse

...AIS Case #1: Chapter 3: Coupon Accounting #52 In order for a fraud to be perpetrated, three conditions must exist. According to Turner and Weickgenannt (2012), “known as the fraud triangle” (p. 80) they are conditions, incentive, opportunity, and rationalization to commit fraud. By understanding these conditions businesses will be able to create effective and quality internal controls system that will help prevent fraud and fraudulent financial reporting, such as the one presented in this case. Even so, with the best set of controls businesses are still susceptible to fraud. As I examined this case study concerning coupon accounting abuse I will answer questions pertaining to company controls, ways to prevent coupon abuse, parties who may be harmed, and the type of fraud presented in the case. a. Discuss whether the situation described can happen to a company with a good control environment. It is imperative for a company to have good internal control environment. Internal control is defined as, “policies and procedures designed to provide management with reasonable assurance that the company achieves its objectives and goals” (Arens, Elder & Beasley, 2012, p. 290). Thus, internal control ensures all business or organizational processes meet these demands. A company that has a good control environment will help deter fraud. According to Turner and Weickgenannt (2012), “The control environment sets the tone of an organization and influences the control......

Words: 919 - Pages: 4

Abuse

...Younger children appear to exhibit higher levels of emotional and psychological distress than older children. Age-related differences might result from older children's more fully developed cognitive abilities to understand the violence and select various coping strategies to alleviate upsetting symptoms. • Elapsed time since exposure. Children often have heightened levels of anxiety and fear immediately after a violent event. Fewer observable effects are seen in children as time passes after the violent event. • Gender. In general, boys exhibit more externalized behaviors (e.g., aggression and acting out) while girls exhibit more internalized behaviors (e.g., withdrawal and depression). • Presence of child physical or sexual abuse. Children who witness domestic violence and are physically abused are at higher risk for emotional and psychological maladjustment than children who witness violence and are not abused (Rosewater & Goodmark, 2007; Edleson, 2004). Comprehensive assessment regarding children's experiences and trauma symptoms, as well as the protective factors present, should inform decision-making regarding the types of services and interventions needed for individual children and families living with violence [pic][pic][pic][pic][pic][pic]...

Words: 595 - Pages: 3

Abuse

...impossible to completely eliminate child abuse still people need to be educated on the signs of it, the effects of the abuse on the children’s life after, and help prevent the abuse. Child abuse is very well common everywhere. Many people cannot even tell if some children are being abused. “In other studies its been noticed that approximately 14-43% of children have experienced at least one traumatic abusive event prior to adulthood” (Susanne Babbel). If these things have been recognized then why are there still more and more higher numbers of the deaths of children from child abuse? The U.S. should recognize better the numbers and how much bigger they are getting as you see the statistic through out the research. The children death rates can only get larger or smaller from here and they only have been getting bigger. “According to the American humane association, an estimated 1,469 children died in 2005 of abuse and neglect” (Susanne Babbel). If this many children have died because of abuse what will the number be a year or more down the road? This epidemic is major and everyone must realize how serious child abuse is. Cops and other agencies should look at the statistics and find more to do to help these young kids and teens. Child abuse didn’t just start recently in the 2000’s, but the first case of child abuse was in 1874 the victim was Mary Ellen Wilson. (Privatefamilymatter.com).“Between 1985 and 1993, the number of cases of child abuse in the United States increased......

Words: 1602 - Pages: 7

Abuse

...double the probability of engaging in many types of crime and the effects were worst for children. Sexual abuse appeared to have the largest effects on crime. This paper focuses on the effect of child maltreatment and neglect. The study examined the effects of different types of abuse and the effect of child neglect. For many decades, the act of child abuse has been a major problem in or society. While most people take the issue lightly, there are more leading cases as the year's progress. This paper review examines child neglect as whole as well as a briefing of each type. The paper includes the effect child abuse has on a society and hope to cope with the abuse. Predicated on these premises, the research question eventually emerged: "What are the causes of child neglect and in what way it affects on children behavior?" I propose to show the causes of child neglect and I will be showing the maltreatment of children by adults in daily life. In attempt to unravel the research question, the method of analysis that would be eventually employed is discourse analysis and observational techniques. Child Neglect 3 Child Neglect Child abuse is the physical, sexual, emotional mistreatment, or neglect of children. Most child abuse occurs in a child's home, with a smaller amount occurring in the organizations, schools or communities the child interacts with. Child abuse is one of the most dangerous and serious problems confronting society. By contrast, in some......

Words: 985 - Pages: 4

Abuse

...There are all kinds of reasons for child abuse. As there are different kinds of child abuse. Such as, physical abuse, sexual abuse, mental abuse, and neglect. Abuse occurs in all cultures. It doesn't care if you're rich or poor, what color your skin is, what your religious background is, or any other mitigating factors. No one is immune to abuse. If a child has unexplained bruises, broken bones, and even cigarette burns, that is physical abuse. Physical abuse can also cause death to the child. No adult has a right to beat a child, no matter what. There are many reasons why a parent or an adult uses physical abuse on a child. The parents or adult could have come from an abusive home himself or herself. If that is all that the adult was taught growing up, then that is all he or she is going to know. This is what makes it possible for it to be passed down to their children and their children will pass it down to their children. It is an endless chain of abuse. Alcohol and drugs play a big role in child abuse. The parents are already stressed out by a variety of social conditions and when they get home from work they can start drinking or using drugs, if not both, This can trigger the violent behavior. I must mention that alcohol & drugs aren't the cause for all parents who abuse. My adopted parents didn't drink alcohol or use drugs. They were even "upstanding" members in our community & active members in the church. Ironic now when I think about my childhood that Sundays were...

Words: 1744 - Pages: 7

Abuse

...Your friend has invited you to a small get together and so you go out and purchase a dress for the party. When you come home and show the dress to your spouse they get upset- they think that the dress is revealing and starts to over think the reason why you have made the purchase. As the situation begins to escalate one of the following types of abuse takes place- choose one of the following to see what happens. Physical: Your spouse believes that you purposefully purchased the dress with the intention that it will draw attention towards you- something that they strongly disapprove of. As a result your spouse ends up giving you a black eye. Physical Aftermath: Your spouse apologizes for hitting you and promises that it will not happen again but you are left with the reminder (scar/bruise) of your spouse’s distrustfulness in you. Now that you have felt the physical pain associated with doing something that your spouse will disapprove of you take measures to ensure that situations like this will not happen again in the future- in order to ensure that you will be spared another beating Sexual: Your spouse begins to question your fidelity and asks you questions such as “who are you trying to impress/seduce?” and “are you seeing someone else, are you being unfaithful to me?”. You are accused of cheating although this is not true- it is an assumption that they have made- and they don’t believe you when......

Words: 2017 - Pages: 9

Abuse

...Abuse is a major dilemma in our civilization today. There are four key forms abuse: emotional/mental abuse, neglect, physical abuse and sexual abuse. Abuse is any ill-treatment to a person that hurts a person in any way, shape or form. This essay is going to focus at the emotional and mental aspect of abuse as I have been dealing with it for the past 23 years. Mental abuse will cause somebody to have disregard of themselves as well as physical and mental problems. But what is happening to us today? What are doctors, nurses or any heath care provider doing to help the ill? If conquered, these weaknesses will make you a stronger, more knowledgeable person that can help you live each day as they come. Living through abuse will guide you to live for what life brings you and not to let anything or anyone hold you back. A good friend once told me that you cannot believe in what you see or hear, believe in the truth. Listen and absorb, there is more being said to you then the person is telling you. Emotional abuse is any type of abuse that affects you mentally rather than physically in life. It can comprise of anything from verbal abuse and regular criticism to more clever strategies, such as bullying, exploitation, and denial to ever be pleased. Emotional abuse can take many faces. Three common examples of abusive behavior include initiating a fight, denial, and making a small something big. Even though there is no conventional description for emotional abuse, emotional......

Words: 2117 - Pages: 9

Child Abuse

...Adult Survivors of Childhood Sexual Abuse | Generalist 241 | Mandie Boster | 4/21/2014 4/21/2014 There have been an increasing number of reported child abuse and child neglect cases rising in the United States. We see them in the headlines and hear of them on the news but very rarely do we hear of stories of adult survivors of child abuse and the treatment or theories that have helped them overcome the trauma. This paper will look at child sexual abuse victims and the adult survivors that have had positive outcomes after treatment or therapy. According to Karakurt and Silver (2014), “childhood sexual abuse (CSA) is any sexual abuse with a child through the use of force, threat or deceit to secure the child’s participation, or any sexual contact with a child who is incapable of consenting by virtue of age, disability, or power differential”. The Social Work Dictionary states (1995), “victims often cannot or are unwilling to understand or resist the advances of the abuser”. Child sexual abuse happens to children of every race, age, and socioeconomic background; perpetrators do not discriminate. According to an article in Healthcare Risk Management (2012), “about 95% of the reported abuse is perpetrated by someone the child knows and trust”. When children are abused by people they love and trust many times they are afraid, ashamed or do not understand how to report the abuse or to whom they should report it to. The cases that are reported are sometimes not......

Words: 4152 - Pages: 17

Abuse

...schools and established a testing procedure to identify students with outstanding abilities. The U.S. Dept. of Labor has been an active force in establishing standards and methods of vocational guidance, helping states to form their own vocational guidance and counseling services. The personnel departments of many large corporations have also instituted systems of guidance to promote better utilization of their employees. Modern high school guidance programs also include academic counseling for those students planning to attend college. In recent years, school guidance counselors have also been recognized as the primary source for psychological counseling for high school students; this sometimes includes counseling in such areas as drug abuse and teenage pregnancy and referrals to other professionals (e.g., psychologists, social workers, and learning-disability specialists). Virtually all teachers colleges offer major courses in guidance, and graduate schools of education grant advanced degrees in the field. Bibliography See E. Landy et al., Guidance in American Education (3 vol., 1966); B. E. Schertzer and S. C. Stone, Foundations of Counseling (1980); W. G. Herron, Contemporary School Psychology (1984). What is the Meaning of Guidance and Its Nature? Senthil Kumar Education In order to understand the meaning of guidance, it is to be accepted that the focal point of guidance is 'an individual, not his problem'. From this point of view, before starting guidance, the......

Words: 1769 - Pages: 8

Abuse

...Abuse From the day that we are born the everyday events that occur in our lives play an important role on the foundation of our memory as well as our physical, mental, and emotion development. Most of us are filled with memories of a good and happy childhood, but unfortunatly that is not the case in all children. Many children undergo much abuse during their childhood. From the physical abuse, sexual abuse, emotional abuse, physical neglect, emotional neglect, to that of edcational neglect, child maltreatment not only affects the child’s childhood years, it affects the indivudual’s adult life as well. Child abuse comes in many different forms and types. The one we are most familiar with is that of physical abuse. Such abuse includes deliberate acts of violence that injure children. Verbal abuse, in forms of shouting, humiliation, threats, and severe put-downs are forms of emotional abuse. Such abuse lowers individual’s self-esteem and disrupts a healthy emotional development. Another type of child abuse would be that of sexual abuse. Sexual acts of any form on a young child are all examples of child maltreatment. For victims of sexual abuse the symptoms are even more severe. A child who is the victim of prolonged sexual abuse usually develops low self- esteem, a feeling of worthlessness and an abnormal perspective on sexuality. The child may become withdrawn and mistrustful of adults, and can become suicidal. Physical and emotional neglect......

Words: 1026 - Pages: 5

Abuse

...Yesterday we discussed potential signs ofmistreatment or abuse in a day care setting. Today we continue our discussion regarding child abuse as we consider the signs of various types of abuse.   While many of these topics are exceptionally troubling, as parents it is important to pay attention to changes in the behavior of our children and recognize the importance of addressing these issues head on. When it comes to unspeakable acts of sexual abuse of children there may or may not be any outwardly physical signs. Therefore, it is important to pay attention to any changes in the child’s behavior. In these situations, a mandated reporter or other person who is concerned about the child’s well-being should listen to the child closely and attentively in a calm and natural demeanor to put the child at ease. Because most sexual abuse is conducted in secrecy, the most important evidence in these cases is the testimony of the victim.  If a child displays the following signs, they may be the victim of sexual abuse: • Has difficulty walking or sitting • Sudden refusal to participate in gym or physical activities • Sudden change in appetite • Demonstrates bizarre, sophisticated, or unusual sexual knowledge or behavior • Becomes pregnant or contracts an STD • Runs away • Reports sexual abuse by a parent or caregiver Parents or adult caregivers who have sexually abused a child may be: • Unusually protective of the child or limit the child’s interaction with others ......

Words: 822 - Pages: 4

Abuse

...An issue that I feel that is important to discuss is child abuse. There are different types of ways a child can be abused and there are signs that show that a child is being abused. The first article I chose to discuss came from the website americanhumane.org. A pattern of behavior by parents or caregivers that can seriously interfere with a child’s cognitive, emotional, psychological or social development is what emotional child abuse is defined. It includes ignoring, rejecting and isolating etc. No child should ever have to experience this and parents definitely shouldn’t render it. Love is supposed to be unconditional for the child. The second article I focused on came from the article titled, Child Abuse from nlm.nih.gov. This article talks about the different outcomes of physical child abuse. “Five children die each day from child abuse,” stated by author Neil K. Kaneshiro. This statement made me feel some kind of way because that is a lot of kids dying each day. I never would have thought so many parent or guardians would abuse their children till the point of death. Children are gifts from God that deserves to be taken care of and cherished. The final type of child abuse I decided to discuss is sexual child abuse. This type of child abuse is real sensitive to me and really upsets me to the point of disgust. The article I found to discuss came from americanhumane.org. It discusses how sexual abuse can harm a child’s well-being and how it can affect them.......

Words: 408 - Pages: 2

Abuse

...to the bedroom, children crying, and a mother as she begins to speak to the police in a very apprehensive matter tells a story of abuse that is not uncommon in neighborhoods all across America. “He came home from work and he was already mad about something. I fixed his supper and he took it to the living room for him to eat”, Jimmy’s wife states. An angry Jimmy starts in on his wife by asking and making demining statements towards her such as, “What is this?” “This ain’t fit for dogs.” “How you expect me to eat this?” He throws his plate in a mad rage with the table across the room. Then he starts in on her first pushing her, cursing, ranting, raving, after the victim cowers down the abuser begins slapping her, then punching her over and over, after she hits the ground, he straddles her where the physical, mental, verbal, emotional abuse continues. The abuser turns his head to where he sees his children begging him to please stop hitting their mother, as he watches his children beg for their mothers life, in a fit of rage he hits his six year old daughter “Jasmine” in the mouth for what he calls “disrespecting him”. Jasmine’s mouth bleeds and her tooth has been knocked loose by her father. Sirens are screeching, the police, arrive to this situation, here they arrest “Jimmy” for domestic abuse, which he is on probation from a prior incident of abuse. Some might ask, “Why does Jimmy become abusive? There are quite a few contributing factors that can answer why Jimmy’s anger......

Words: 823 - Pages: 4

Abuse

...to the bedroom, children crying, and a mother as she begins to speak to the police in a very apprehensive matter tells a story of abuse that is not uncommon in neighborhoods all across America. “He came home from work and he was already mad about something. I fixed his supper and he took it to the living room for him to eat”, Jimmy’s wife states. An angry Jimmy starts in on his wife by asking and making demining statements towards her such as, “What is this?” “This ain’t fit for dogs.” “How you expect me to eat this?” He throws his plate in a mad rage with the table across the room. Then he starts in on her first pushing her, cursing, ranting, raving, after the victim cowers down the abuser begins slapping her, then punching her over and over, after she hits the ground, he straddles her where the physical, mental, verbal, emotional abuse continues. The abuser turns his head to where he sees his children begging him to please stop hitting their mother, as he watches his children beg for their mothers life, in a fit of rage he hits his six year old daughter “Jasmine” in the mouth for what he calls “disrespecting him”. Jasmine’s mouth bleeds and her tooth has been knocked loose by her father. Sirens are screeching, the police, arrive to this situation, here they arrest “Jimmy” for domestic abuse, which he is on probation from a prior incident of abuse. Some might ask, “Why does Jimmy become abusive? There are quite a few contributing factors that can answer why Jimmy’s anger......

Words: 823 - Pages: 4

Abuse

...to the bedroom, children crying, and a mother as she begins to speak to the police in a very apprehensive matter tells a story of abuse that is not uncommon in neighborhoods all across America. “He came home from work and he was already mad about something. I fixed his supper and he took it to the living room for him to eat”, Jimmy’s wife states. An angry Jimmy starts in on his wife by asking and making demining statements towards her such as, “What is this?” “This ain’t fit for dogs.” “How you expect me to eat this?” He throws his plate in a mad rage with the table across the room. Then he starts in on her first pushing her, cursing, ranting, raving, after the victim cowers down the abuser begins slapping her, then punching her over and over, after she hits the ground, he straddles her where the physical, mental, verbal, emotional abuse continues. The abuser turns his head to where he sees his children begging him to please stop hitting their mother, as he watches his children beg for their mothers life, in a fit of rage he hits his six year old daughter “Jasmine” in the mouth for what he calls “disrespecting him”. Jasmine’s mouth bleeds and her tooth has been knocked loose by her father. Sirens are screeching, the police, arrive to this situation, here they arrest “Jimmy” for domestic abuse, which he is on probation from a prior incident of abuse. Some might ask, “Why does Jimmy become abusive? There are quite a few contributing factors that can answer why Jimmy’s anger......

Words: 823 - Pages: 4