北美財務報告(英文版)(編輯修改稿)
2024-10-25 08:55 本頁面
【文章內(nèi)容簡介】 SB (Financial Accounting Standards Board and the CICA ( Canadian Institute of Chartered Accountants) are independent bodies.,Standard Setting amp。 Auditing 2,Auditing (external) ensures that a third independent party has examined the financial statements and that they are in accordance to GAAP( Generally Accepted Accounting Principles).,Efficient Securities Markets,The prices of securities (stocks) “properly reflect” all information that is publicly known about these securities. Investors will quickly adjust to new or corrected information as it becomes available. Investors cannot expect to earn abnormal returns i.e. a return on a security in excess of its normal expected return.,WORLDCOM(Communications Industry) 1,Largest Bankruptcy in history. Bankruptcy date = July 21, 2002. Total assets (prebankruptcy) = US$103,914,000,000 approximately 850,000 millions Yuans or RMB(assuming 1 us dollar approximately equal to 8.2 Yuans),WORLDCOM(Communications Industry) 2,Internal Auditor (Cynthia Cooper Time Magazine Person of the year for 2002) went to Board of Directors , claiming assets should be written off the balance sheet. B.O.D. agree with her. On writing off assets, large losses. Stock prices fell down steeply.,Enron Corp ( Energy Industry),Company went bankrupt on December 2,2001. Total assets prebankruptcy = US $63,392,000,000 approximately equal to 520,000 millions Yuans or RMB. Profits overstated。 revenues recognized before they are earned. Liabilities hidden from balance sheet. Gambling on energy futures contracts. Sherri Watkins ( Enron manager) blew the whistle but no one listened.,Arthur Andersen (Former “Big Five”Accounting Firm),Issued unqualified opinion to financial statements. Did not disclose accounting irregularities. Shredded documents to hide evidence. Guilty of obstructing justice.,Management’s Incentives to Manage Earnings,Income taxes—Postpone payment by minimizing reported income Bonus—Maximize their bonuses by increasing reported income Debt Agreements– Easier to meet debt agreements (coven
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