The Continuum between Legitimacy and Fraud
... Continuum between Legitimacy and Fraud
Bochner, S., & Clark, D. (2009). Securities Disclosure: When is Managing to a Forecast Illegal “Earnings Management.” The Corporate and Securities Law Advisor, Vol. 22(5). Pp. 1-5.
Bochner, a corporate and securities partner, and Clark, a securities litigation partner, discuss the line that separates legitimate management and illegal earnings manipulation in the corporate sector. The paper discusses the fact that there is a very small distinction between legitimate management practices that are aimed at meeting financial forecasts and fraudulent activities. The paper goes on to state that, in some instances, managing earnings to conform to forecasts is not illeg...