北美財(cái)務(wù)報(bào)告ppt課件-在線瀏覽
2024-12-21 18:17本頁面
【正文】 ns 13 Standard Setting amp。 Auditing 1 ? Standard setting or regulation is necessary to protect the investors (conflicting interests of investors and managers). The FASB (Financial Accounting Standards Board and the CICA ( Canadian Institute of Chartered Accountants) are independent bodies. 14 Standard Setting amp。 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. 19 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. 20 Management’s Incentives to Manage Earnings ? Ine taxes—Postpone payment by minimizing reported ine ? Bonus—Maximize their bonuses by increasing reported ine ? Debt Agreements– Easier to meet debt agreements (covenants) by increasing ine and assets ? Stock options (give you the right to purchase a stock at a fixed price in some future period)—maximize share prices (believed to be related to reported ine). 21 Accruals and Earnings Management ? Amortization expense ? Increase in receivables ? Increase in inventory ? Decrease in accounts payable and accrual liabilities 22 What could be done? ? Better accounting standards and better disclosure. Less emphasis on historical cost and more emphasis on current market value of assets and liabilities on balance sheet. ? Fore example, record all stock options as an expense on ine statement, when issued. ? Restrictions on auditors . auditors not allowed to do consulting work for firm they audit ? Greater accountability of board of directors and more punishment for wrong doings. 23 Ethics and accounting ? Ethics ? Rules Of Professional Conduct ? Legal ? What is legal or meet the rules of professional conduct may not be considered ethical.
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