What is creative accounting, Financial Management

Assignment Help:

What is Creative accounting

Creative accounting (also termed as aggressive accounting or earnings management) distorts financial analysis of company accounts. Creative accounting is done by organisations to perhaps enhance balance  sheet  or  performance  by  either  exploiting  loopholes in  the  accounting  standards or deliberately  not  showing  certain  items.   Listed  companies  specifically have  added  pressures  for  the maintenance  and  increase  of  share prices; this  obviously  has  an  influence  on  the  valuation  of  company.   As  share  prices  are  stipulated  by  the  market,  information  fed  to  market  can  be manipulated to ensure this.

There has been a severe crackdown on misleading accounts specifically with the disasters such as Enron and WorldCom.   In  USA  there  are  now  huge  financial  penalties  and  even  jail  sentences  for directors deliberately misleading users the accounts. In UK directors are legally obliged to produce true and fair accounts.

 


Related Discussions:- What is creative accounting

Reinforced concrete design, Q. Reinforced concrete design? In BS8110 fo...

Q. Reinforced concrete design? In BS8110 for reinforced concrete design, it is stated that longer tension lap lengths have to be provided at the top of concrete members. The mo

Geographical classification of mutual funds , Geographical Classification o...

Geographical Classification of Mutual Funds : Nations' boundaries provide territorial restrictions on the sale and purchase of mutual fund units or shares as is the case in com

What is the advantages of IFRS 8, What is the advantages of IFRS 8 A...

What is the advantages of IFRS 8 Advantages Allows users to view internal management's approach and highlights what's important from management's point of view.

International monetary system, what is the criteria for a good internationa...

what is the criteria for a good international financial system

Liquidity mix, I am facing some problems in my assignment of Liquidity Mix....

I am facing some problems in my assignment of Liquidity Mix. Can anybody suggest me the proper explanation for it?

Define risk relate with large amount of short term financing, What are the ...

What are the risks related with using a large amount of short-term financing for working capital? Using a large amount of short-term financing usually permits funds to be raised

Calculate super normal profit, The economic analysis is done for Schlumberg...

The economic analysis is done for Schlumberger, oilfield service company. They are # 1 in terms of market caps, revenue and employees globally. If any references are used / outside

Operating cycle, discuss the applicability operating cycle considering broi...

discuss the applicability operating cycle considering broilers in uganda?

Difference between mortgage bond and a debenture, Difference between mortga...

Difference between mortgage bond and a debenture? A mortgage bond is a secured bond whereas a debenture is an unsecured bond.

What is diversification, Diversification A  strategy  which tends to mo...

Diversification A  strategy  which tends to move  into  new  products  and  new  markets  in  which  organisation is unfamiliar with. Related for example vertical forwar

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd